2025-01-25 02:16:00 :
(Bloomberg) — U.S. officials have dropped appeals of a lawsuit filed by UnitedHealth Group Inc. challenging the federal Medicare program’s quality ratings, a potential sign for insurers protesting the ratings. Good news, the rating resulted in billions of dollars in payments for private plans.
The Centers for Medicare and Medicaid Services withdrew its appeal in a filing Friday in federal court in Texas. The decision could signal that the Trump administration will not fight insurance companies over claims they are rated too low, a key issue in a pending lawsuit filed by Humana Inc. that could seriously impact its future profitability. .
The move is an abrupt shift in the agency’s stance. Medicare filed its notice of appeal on Jan. 21, the day after President Donald Trump’s second term began.
A federal judge sided with UnitedHealth in November, saying the U.S. wrongfully downgraded the insurance giant’s quality rating. Several health insurance companies are suing the government over how ratings, called stars, are calculated. No company is more affected by outcomes than Humana, which specializes in private health insurance plans.
The company is suing in the Northern District of Texas, seeking to reverse the downgrade of its star rating. Analysts described the outcome of the lawsuit as a “binary” event for the company because much of its revenue is tied to Medicare spending.
The challenged ratings will affect payments in 2026. Analysts at Leerink estimated in November that a lower star rating would have a negative impact on the company of $1.8 billion in 2026.
A spokesman for the U.S. Attorney’s Office for the Eastern District of Texas declined to comment on the reasons for withdrawing the appeal. CMS declined to comment, citing a suspension of department-wide communications.
UnitedHealth had no immediate comment. The document was first reported by Stat News.
–With assistance from Ike Sweetlitz and Madeleine Mekelburg.
(Updated with additional information starting from third paragraph)
More stories like this can be found at Bloomberg.com
Follow us On Social Media Twitter/X