The Justice Department wants Humana's lawsuit challenging a CMS rule that would implement stricter auditing standards on Medicare Advantage plans moved to a different court, then thrown out.
In a Dec. 18 court filing, attorneys argued Humana and its Texas subsidiary, based in Dallas, have no basis to file in the Fort Worth District.
U.S. District Judge Reed O'Connor, who presides over Fort Worth, has ruled in several high-profile healthcare cases. In 2018, he ruled the Affordable Care Act unconstitutional and in 2022 struck down the preventive care requirement of the law, though the case is still being appealed.
Humana filed its challenge Sept. 1. In the court filing, Humana asked the judge to require CMS to vacate the final rule, as it will have "unpredictable consequences for Medicare Advantage organizations and the millions of seniors who rely on the Medicare Advantage program for their healthcare."
Lawyers for the Justice Department argued the case should be moved to the Dallas division of the Northern District of Texas court.
"Humana has its principal place of business in Louisville, Kentucky, and its Texas subsidiary isbased in Dallas. Yet plaintiffs have filed in the Fort Worth division, where no party resides and nothing giving rise to their claims occurred. The case should be transferred, so that the arguments for dismissal can be heard in the proper division,"attorneys wrote.
The attorneys wrote Humana's challenge should ultimately be dismissed, because CMS has not implemented or completed any audits based on the new risk-adjustment rules, and it is uncertain "whether or when Humana or its Texas subsidiary will be audited under the challenged rule."
In January, Bloomberg reported Humana may have the largest risk from clawbacks of major insurers, with as much as 17% of its 2023 earnings before interest, taxes, depreciation and amortization facing scrutiny — or $900 million. As of June 30, Humana had nearly 5.8 million Medicare Advantage members, with plans to add around 825,000 more before the end of this year.
When asked for comment, Humana referred to a statement previously shared with Becker's, in which a Humana spokesperson said CMS "failed to meet its legal obligations in the federal rulemaking process to give a reasoned justification for the rule or provide a meaningful opportunity for public comment."