Clover Health (CLOV) Wins Lawsuit on Star Ratings, Soars to Record High

Clover Health Investments Corp. (NASDAQ:CLOV) is one of the 11 Stocks Racking Up Monstrous Gains.

Clover Health soared to a new 52-week high on Thursday, after earning the backing of a US Court over its legal battle with the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) in relation to what it deemed an unlawful reduction to its 2026 star ratings that could potentially slash millions worth of quality bonuses.

In intra-day trading, the stock jumped to a record high of $4.23 before trimming a few cents to end the day just up by 16.43 percent at $4.18 apiece.

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In a Court order released recently, the US District Court for the Southern District of Georgia, Brunswick Division, partially sided with Clover Insurance Company—a business unit of Clover Health Investments Corp. (NASDAQ:CLOV)—in relation to its 2026 Star Rating downgrade to 3.5 from 4.0, which could slash its statutorily mandated quality bonus and related payments by $120 million.

The Court judge rejected the HHS’ request to dismiss the case and ordered the CMS to recalculate the rating.

The lawsuit stemmed from what Clover Health Investments Corp. (NASDAQ:CLOV) believed to be improper use of quality measures and methodologies that allegedly reduced its rating to 3.5 from what would have been 4.0.

According to Clover Health Investments Corp. (NASDAQ:CLOV), the rating would reduce government reimbursement, hurt its competitiveness, and could weaken future growth.

As of writing, the CMS has yet to issue a comment on the Court order.

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