Florida – Florida Blue is suing the Centers for Medicare and Medicaid Services and the U.S. Department of Health and Human Services. Filed last Friday in Washington, D.C., the lawsuit relies on the allegation that severe flooding in Broward County in April 2023 neglected to be taken into account by the federal Star Ratings system, therefore unfairly ranking the insurer.
Providing Florida Blue Medicare Advantage and Medicare prescription-drug plans, these ratings fell short of expectations in the federal system, which rates health plans from one to five stars. These evaluations are essential since they affect seniors’ enrollment decisions and define the degree of federal bonuses given to different plans. Florida Blue contends that the flooding’s disruption resulted in lower doctor visits and prescription refills, therefore altering the performance statistics used to gauge their ratings.
According to the lawsuit complaint, the insurer argues that its Medicare Advantage HMO would have scored a 4.5-star rating instead of 3.5 and their prescription-drug plan would have gotten three stars instead of 2.5 had the government authorities taken these unique events into account. The complaint also notes that the Medicare Advantage preferred-provider organization (PPO) plan of Florida Blue suffered similarly.
Though it was not followed in their situation, the lawsuit notes that there is an “extreme circumstances rule” meant to prohibit penalization in such emergency conditions. Public health emergencies declared by the Secretary of Health and Human Services must be invoked under this rule. While Governor Ron DeSantis and President Joe Biden acknowledged the seriousness of the Broward County crisis with respective emergency declarations, Secretary Xavier Becerra issued no such proclamation.
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Florida Blue claims that this control has resulted in large financial losses, estimated to be tens of millions of dollars, which could have otherwise been reinvested back into member benefits. The federal authorities have not only affected the financial situation of the insurance but also potentially the healthcare coverage of its subscribers by not changing the ratings.
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Under administrative procedure Act rules, the suit claims the federal health authorities of arbitrary and capricious implementation of the extraordinary circumstances rule. The legal argument highlights the more general consequences of how federal health plan ratings include natural disasters and other significant interruptions.
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This case might establish a standard on how health emergencies are counted in the assessment of health care services, therefore impacting future policy on health plan ratings in general. Healthcare providers and insurance companies both depend on the lawsuit’s result since it might bring about major changes in the Medicare Star Rating system’s administration.
Humana and Elevance Health have also challenged their 2025 ratings in court.
