Medicare Advantage (MA) star ratings have become a hot topic for Humana Inc. (NYSE: HUM).

On Oct. 18, the company filed a lawsuit against the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) over its drop in star ratings.

The number of Humana MA plans rated 4-star or higher is expected to see a major decrease next year. The decline could impact the company’s bonus payments from CMS, as well as revenue generally.

The lawsuit alleges that federal regulators actions were “arbitrary and capricious” when it came to calculating Humana’s quality scores. Humana wants the court to vacate the company’s 2025 star ratings, and calls for a recalculation.

The company is also seeking greater visibility around calculations.

With this in mind, star ratings were a popular topic during the company’s third-quarter earnings call Wednesday.

“We have to make meaningful stars progression, is the way that I would describe it,” Humana CEO Jim Rechtin said during the call. “We’re not putting a specific number on it. There are too many puts and takes across different variables in the business to try to put a specific number on it.”

Rechtin said this in relation to Humana’s 3% margin target.

Humana is one of the largest insurers in the country, and has about 6 million Medicare Advantage (MA) members underneath its health plans. In addition, Humana has its provider services arm CenterWell, which includes home health, pharmacy and primary care.

During the call, Humana’s leadership also revealed that the company had plans to expand its senior-focused primary care clinics.

“We recently released a study, in collaboration with a leading researcher and professor from Harvard, that demonstrates both the clinical and economic value the clinics create,” Rechtin said. “It found that our members have a better experience when they are part of a senior-focused primary care clinic. We expect to add another roughly 40 clinics this year. Often, this is through acquisition of underperforming clinics that we’ve demonstrated we can pretty rapidly turn around, and our patient growth continues to outpace expectations.”

Rechtin also expressed his belief that value-based care ventures remain promising for the company.

“Our conviction remains high regarding the positive outlook for MA and for value-based care,” he said.

Currently, the company is working on treating up to 80,000 patients under a value-based home health model.

For Q3, Humana revenue checked in at $29.3 million, compared to $26.4 million during the same period last year.

The company CenterWell segment brought in $5 million, compared to $4.6 million during Q3 2023.

Humana and Cigna (NYSE: CI) also recently resumed merger talks, according to reports.