Mayor Adams’ administration won a key ruling Thursday in its efforts to move thousands of retired municipal workers into a highly controversial privatized Medicare Advantage plan.

The decision, from an independent arbitrator overseeing the health care dispute, appears to pave the way for the administration to implement the Medicare Advantage Plan as the only insurance option available to municipal retirees.

A grassroots group of municipal retirees that has been fighting the city’s efforts is likely to challenge the ruling in court, though.

The Adams administration for nearly a year has pushed to enroll the city’s roughly 250,000 retired workers in Medicare Advantage — which could result in as much as $600 million in municipal budget savings annually, due to federal subsidies and a partnership with a private health insurance provider.

Officials making the case for the switch say the move is critical as the city braces itself for a projected $6 billion budget deficit by 2026.

In the latest twist, the arbitrator, Martin Scheinman, found the latest Advantage model proposed by the Adams administration would bring the city into compliance with local law.

The previous plan had been rejected by two courts because it would have assessed a fine against retirees who stuck with the traditional Medicare plan instead of accepting Advantage. That ran afoul of a local law that requires the city to provide retirees with premium-free health coverage for life.

Under the new plan, the private Medicare Advantage plan administered by Aetna will be the only plan available for retirees. With no fine in the picture, Scheinman found the city is in compliance with the law and can press ahead.

“While I understand change can be difficult, particularly when it comes to long-time health benefits, circumstances have evolved to threaten the sustainability of robust premium-free benefits for actives and retirees,” Scheinman found.

“Simply stated, moving to a MA (Medicare Advantage) program for City retirees is prudent, responsible and essential,” he wrote.

Many retirees disagree.

Marianne Pizzitola, president of NYC Organization of Public Services Retirees, which successfully sued the city over the Medicare Advantage debacle before, blasted Scheinman for not involving her group in the arbitration proceedings, accusing him of “voicing the interests” of Adams’ administration.

Pizzitola, a retired FDNY EMT, also said her group is likely to sue the administration again if it moves ahead with Scheinman’s recommendations.

“Retirees were not part of the arbitration process, but if the city seeks to violate retirees’ rights again, retirees will once again have to seek judicial intervention to protect their healthcare rights,” said Pizzitola, whose group has maintained that an Advantage plan would wreck their health care benefits.

Medicare Advantage plans can offer lower up front costs in some cases, but typically are more limited in terms of providers and other health care options. A recent federal study found retired city workers could be at risk of losing out on “medically necessary care” if they enroll in the Adams administration’s favored plan, under which roughly 13% of rejected claims would have been covered under traditional Medicare.

United Federation of Teachers President Michael Mulgrew, who serves as vice chair of the Municipal Labor Committee, which supports Adams’ Advantage push, pointed on Thursday to rising costs of health care over the last decade that, barring federal action, he said require negotiations with the city in the interim.

“Most importantly, we want to maintain plans that do not require our members to pay the thousands of out-of-pocket dollars that most workers now typically have to pay for health insurance,” Mulgrew said in a statement.

“A new Medicare Advantage plan will be negotiated to keep that premium-free status, and we will make sure that it meets our retirees’ needs, even while saving hundreds of millions of dollars that will be dedicated to other health care services,” he said.

The arbitrator’s opinion on Thursday pointed out that there is still the possibility “choice may be retained” if the City Council amends municipal statutes within 45 days to permit retirees to buy into an alternative plan. The Council has so far shown no sign that it will act on that front.

The opinion gave the city and Municipal Labor Committee 25 days to negotiate an agreement with the health care company Aetna.