Alignment Healthcare (NASDAQ: ALHC) Increasingly Scrutinized Over H3815 Cut Points And CMS Bonus Eligibility - HBSS

SAN FRANCISCO, Oct. 30, 2026 /PRNewswire/ -- On October 9, 2026, investors Alignment Healthcare, Inc. (NASDAQ: ALHC) saw the price of their shares slide another 13% to close at $7.55, reaching a 52 week low, after the Centers for Medicare & Medicaid Services ("CMS") lowered its 2027 4.0 Star Rating to a 3.5 Star Rating for Alignment's California HMO health plan contract ("H3815"), which serves 75% of Alignment's health plan membership.

The revelations follow growing investor concerns over H3815's performance during CMS' measurement period, including "cut points" established by CMS to assess H3815's Star Rating.

National shareholder rights firm Hagens Berman Investors who have suffered significant losses are encouraged to submit their losses now.

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Summary of Alignment Healthcare (ALHC) Investigation:

The investigation focuses on the propriety of Alignment's disclosures about the status of its eligibility to receive CMS quality bonus payments tied to maintaining a 4.0 Star Rating for its California HMO health plan contract ("H3815"). H3815 is critical to Alignment, as it serves 75% of the company's combined health plan membership.

As recently as an investor conference during July 30, 2026, in response to an investor who flagged a meaningful upward drift in Stars cuts in recent years and who questioned management's confidence in 2028 CMS quality bonus payments along with the company's ability to perform against those thresholds, CEO John Kao assured attendees that  "I feel good about our position." Nonetheless, that day, skepticism set in and drove the price of company shares down about 20%.

Then, on September 15, 2026, during a Baird Healthcare conference, the analyst asked, "you now have the final cut points and visibility into your measure-level performance[]" and "[c]an you comment on your overall positioning?" Kao responded, "I cannot talk about it at all[.]" Another analyst reportedly wrote that "the company opted not to comment on the 2027 Stars which compared to the prior years, where the company was generally much more open to discussing their positioning." The market immediately responded to the dialogue by sending the price of Alignment shares down another 20% that day.

By October 8, 2026, after the markets closed, investors learned more. That evening, Alignment filed a current report with the SEC disclosing that CMC downgraded the company's H3815 Star Rating to 3.5 and said "[t]he change in Star Ratings performance for rating year 2027 will impact the Company's quality bonus payments for fiscal 2028[]" in that the California plan became ineligible for CMS quality bonus payments tied to the downgraded 3.5 Star Rating. The market swiftly responded by sending the price of Alignment shares down again – this time by about 13%.

Between July 30, 2026 (the "I feel good about our position" assurance) and October 9, 2026 (the next trading day after the revelation), the price of Alignment shares declined by roughly 59%. The company's market capitalization wipeout totaled over $2.2 billion in a little over 2 months.

"We are investigating when Alignment management knew it should not feel good about cut points and whether they were sufficiently transparent eligibility for CMS bonus payments," said Reed Kathrein, the Hagens Berman partner leading the firm's investigation.

Whistleblowers: Persons with non-public information regarding Alignment should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].

About Hagens Berman
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SOURCE Hagens Berman Sobol Shapiro LLP