A claim by Blue Cross and Blue Shield of Florida that its Medicare insurance plans' star ratings scores should have received a lesser ding was rejected by a district court May 16.
The judge denied the Blues plan's motion for summary judgment but granted the government’s cross motion for summary judgment to uphold the rule.
The plan previously sued the federal government for allegedly giving the insurer unfair star ratings scores for the 2025 benefit year during extreme environmental circumstances.
Flooding in the state in April 2023 resulted in FEMA disaster relief, a state of emergency and worse care for members, the Blues plan said. If former Department of Health and Human Services Secretary Xavier Becerra had declared a public health emergency or issued a section 1135 waiver, the health plan would’ve been eligible to receive a minimized impact to its ratings. Further, the plaintiffs said the provision central to the scoring, the Extreme and Uncontrollable Circumstances Rule, contradicts other Centers for Medicare & Medicaid Services (CMS) rules.
The court rejected (PDF) Florida Blue’s criticism.
“Plaintiffs’ argument, however, overlooks that CMS did not intend for the rule to create a broad exception for star ratings adjustments,” said Judge Amit Mehta. “Rather, CMS sought to ensure that only a narrow set of the most affected contracts benefited from the rule.”
Mehta added that the provision was designed to address impacts only to “operations” or “ability to serve enrollees” but not any foreseeable negative impact.
It’s an encouraging sign for the CMS. In recent months, the agency has faced legal complaints from insurers over the results of star ratings scores. The CMS lost lawsuits against SCAN Health Plan and Elevance Health and withdrew its appeal against UnitedHealthcare. Other star rating lawsuits are currently pending.
These scores are determined by plan performance, but the calculations are sometimes controversial. They also restrict the ability of plans to invest in, and market, their products for the following year if they receive poor scores.
Blue Cross and Blue Shield of Florida contacted the CMS throughout 2024, indicating the flood would unfairly impact its star ratings. CMS said the requirements that must be present to impose a section 1135 waiver are codified, and exceptions could not be made. Florida Blue countered that it was getting punished for a circumstance outside the insurer’s control, which is the opposite intention of the star ratings program.
“The court declines to disturb what is essentially a policy judgment by CMS,” determined Mehta.