“Leapfrog’s practices harm the hospitals, insurers, employees, and patients; the only beneficiary of this methodology is Leapfrog itself.”

“...the goal to maximize revenue came at the cost of comprehensive and accurate Safety Grades.”

A United States District Judge ruled that Leapfrog engaged in deception by marketing its grades to the public as a meaningful measure of safety – while in reality, the so-called “Safety Grades” were built on made-up scores, not actual hospital performance.

Federal Judge Donald Middlebrooks ruled that Leapfrog’s “grades are not based upon performance. The grades are the result of Leapfrog’s acknowledged goal of punishing nonparticipants as a means of forcing hospitals to cooperate in submitting their Surveys.” He added, “The record shows that Leapfrog’s conduct evinces the kind of ‘deceptive and bullying conduct’” that violates the law.

The Court ordered swift and decisive action to address “Leapfrog’s change in methodology [that] has no scientific basis, unfairly penalizes non-participating hospitals, and misrepresents hospital safety.” Leapfrog was ordered to remove from its website the Safety Grades assigned to the Community Hospitals beginning in Fall 2024 and send corrective disclosures to all entities that paid to license the Safety Grades following that date, among other actions and requirements.

The Court also found that Leapfrog failed to adhere to its own internal processes, publicizing scores using a methodology that was not approved by its expert panelists or voted on by its Board. Additionally, the ruling found, “Chief Executive Officer of Leapfrog, Leah Binder, had also contemporaneously suggested ‘imputing… the lowest score” would be a “very big deal to hospitals (and a major incentive to report to the survey).’”

As a result, the Court found Leapfrog’s methodology was “neither reliable nor defensible,” and that “Leapfrog uses the threat of arbitrarily assigned Safety Grades to coerce participation in the Survey among hospitals that are unwilling or unable to endure what one commentator described as ‘blackmail’ designed to increase participation.”

The Court also recognized that Leapfrog’s grades are broadly disseminated and relied upon by patients, employers, and insurers here in the Palm Beach market, resulting in real harm to the very consumers Leapfrog claims to serve. The Court described “a range of harms including patient diversion and delay of care, physician concerns, insurer inquiries, and declines in patient volume,” as a result of Leapfrog’s deceptive practices. 

We are pleased that the Court ordered meaningful relief. But this is bigger than five hospitals: any organization influencing life-and-death healthcare decisions must be transparent, data-based, and accountable. We look forward to Leapfrog’s swift compliance with the Court’s order, and encourage hospitals and the healthcare industry to review today’s decision carefully and insist on rating systems that are transparent, scientifically grounded, and fair.