HHS is appealing a judgment that vacated CMS’ Medicare Advantage Risk Adjustment Data Validation program final rule, according to a Nov. 21 filing in the U.S. District Court for the Northern District of Texas.
The 2023 final rule allowed CMS to recover billions in suspected overpayments based on extrapolating audit results from a small sample of enrollees, court documents said.
The final rule cut the “fee-for-service adjuster” in MA audits. The adjuster intended to strike “actuarial equivalence” between MA and fee-for-service claims, but CMS did not believe RADV audits had to abide by the mandate. Humana filed the lawsuit to challenge this “arbitrary and capricious reversal.”
The insurer also alleged CMS carried out retroactive rulemaking and offered inadequate notice, additional violations of the Administrative Procedure Act.
In September, a federal judge sided with Humana, saying the “failure to comply with the procedural requirements of the APA was not harmless.”
