Judge Rejects Florida Blue’s Quest to Reevaluate Medicare Advantage Star Ratings
A federal judge has ruled against Florida Blue in a legal challenge regarding the company’s Medicare Advantage (MA) star ratings. Florida Blue argued that the severe flooding in Broward County, Florida, during April 2023 adversely affected its MA members' office visit and prescription refill rates, leading to a detrimental impact on the insurer’s star ratings. Despite state and federal disaster declarations, CMS did not issue an 1135 waiver or designate the flooding as a public health emergency, thus excluding the event from the star rating’s extreme-circumstances adjustment rule.
The Centers for Medicare & Medicaid Services (CMS) employs strict guidelines to adjust star ratings in cases of natural disasters and public health emergencies. The extreme-circumstances rule is triggered only when CMS officially recognizes an event as a public health emergency, which did not occur with the Broward County flooding. The judge ruled the agency’s decision not to grant that status was neither arbitrary nor capricious, noting that Florida Blue failed to demonstrate the flooding’s effects on its membership were comparable to other recognized natural disasters.
Florida Blue expressed concerns about significant financial losses, claiming it stands to forfeit tens of millions in bonus payments linked to its lower star ratings. This ruling highlights the regulatory nuances and challenges intrinsic to star rating adjustments for insurers who serve populations affected by localized disasters without corresponding federal public health emergency declarations.
This case fits within a broader context of multiple insurers seeking reevaluation of their 2025 star ratings through legal avenues. Notably, CMS recently amended star ratings for UnitedHealthcare and Centene after a court ruled on issues related to disputed customer service metrics. Additional legal challenges contesting star rating calculations for various insurers remain pending, reflecting ongoing scrutiny and litigation risks in the Medicare Advantage rating system.
The decision underscores CMS's stringent criteria for public health emergency declarations, which directly affect the financial and reputational outcomes for MA plans. Healthcare payers and providers should closely monitor evolving jurisprudence around rating methodologies and extreme circumstance adjustments as these impact performance incentives and regulatory compliance.