Blue Cross Sues Over Florida Plans’ Reduced Medicare Ratings

Health insurer Blue Cross and Blue Shield of Florida Inc. is accusing the federal Medicare agency of failing to apply an adjustment to its plans’ quality ratings after severe flooding in the state disrupted care for members.

The lawsuit filed Friday in the US District Court for the District of Columbia alleges a 2019 rule from the Centers for Medicare & Medicaid Services that sought to minimize the effects of natural disasters and other extreme events on Medicare plans’ “star ratings” is “arbitrary and capricious.”

Florida Blue, which offers Medicare Advantage and Part D prescription drug plans, said in the complaint that the federal government failed to apply the rule to the company’s plans after historic flooding in Broward County in 2023 “impaired Florida Blue’s ability to coordinate care for its members and its members receipt of care in that county.”

As a result, Florida Blue said its plans received lower star ratings for 2025, which will be used to determine how much the plans will receive in 2026 from the Medicare Advantage Quality Bonus Payment program. Medicare managed care plans this year are expected to receive $15 billion from the program, according to the Medicare Payment Advisory Commission.

“Florida Blue’s lower ratings negatively impact its revenue and its ability to serve its members,” and “will cause Florida Blue to lose tens of millions of dollars—money it would otherwise be able to put toward greater member benefits,” the Florida Blue said in the complaint.

The lawsuit follows multiple complaints filed over the CMS’ 2025 star ratings. Last month, Judge Jeremy Kernodle of the US District Court for the Eastern District of Texas ordered the CMS to recalculate UnitedHealth Group’s 2025 star ratings, finding the agency “acted contrary to its own guidelines” in determining that a CMS test caller didn’t “connect” with the insurers’ telephone call center team.

Complaints filed by insurers Humana Inc. and Centene have asked courts to order the CMS to recalculate their star ratings, arguing the insurers could lose millions of dollars if their disputed ratings are allowed to stand.

Florida Blue wants a federal judge to set aside a portion of the extreme circumstances rule that conditions star ratings adjustments on the health and human services secretary’s declaration of a public health emergency in a particular geographic area, as well as a decision to waive certain requirements otherwise applicable to Medicare participants, providers, and plans.

The HHS didn’t issue an emergency declaration in Broward County after the flooding, thus disqualifying Florida Blue from the adjustment despite “the extreme and uncontrollable circumstances” at that time, the company said in its complaint.

Crowell & Moring LLP is representing Florida Blue. A CMS spokesperson said the agency does not comment on litigation.

The case is Blue Cross and Blue Shield of Florida v. HHS, D.D.C., No. 1:24-cv-03609, complaint filed 12/27/24.