By Brendan Pierson
(Reuters) - The U.S. Centers for Medicare and Medicaid Services on Friday said it would not appeal a court order that it recalculate the public star ratings it gave to UnitedHealth's privately administered Medicare health insurance plans, which the insurer said would cost it millions of dollars from lost customers.
The agency did not give a reason for withdrawing the notice of appeal it had filed just three days earlier. It was not clear whether the move was part of a broader policy change by President Donald Trump's new administration.
CMS declined to comment, citing a pause on public communications by health agencies ordered by the Trump administration. UnitedHealth did not immediately respond to a request for comment.
The lawsuit concerns UnitedHealth's Medicare Advantage plans, which are privately administered health insurance plans funded by the federal Medicare program for those age 65 and older and some Americans with disabilities.
CMS assigns Medicare Advantage plans ratings of one to five stars to help consumers choose among plans. UnitedHealth said in its lawsuit that some of its Medicare Advantage plans lost half a star because of a single unsuccessful call placed by a CMS test caller seeking a foreign language interpreter.
UnitedHealth said that CMS was arbitrary and capricious in docking the star ratings on the basis of a single call, and said that an error by the test caller was responsible for failing to connect with a representative.
A Texas federal judge in November agreed and ordered CMS to recalculate the star rating.
Other insurers, including Elevance, Centene (NYSE:CNC) and Humana (NYSE:HUM), have also sued CMS over what they allege are unfair star ratings.
CMS previously recalculated star ratings for Elevance and non-profit SCAN Health Plans' Medicare Advantage plans after losing court rulings.
UnitedHealth Group (NYSE:UNH) shares were up about 0.6% at $532.86.