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September 01, 2023 02:04 PM


HUMANA SUES TO STOP MEDICARE ADVANTAGE AUDITS RULE, CLAWBACKS

Nona Tepper
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Humana is suing to block the implementation of a plan to recoup billions of
dollars the federal government says it overpaid to Medicare Advantage carriers.

The health insurance company filed suit in the U.S. District Court for the
Northern District of Texas on Friday against a regulation the Centers for
Medicare and Medicaid Services announced in January, more than four years after
first proposing it. CMS intends to collect payments dating back to 2018, toughen
risk-adjustment data validation audits and scrap an adjustment factor designed
to align Medicare Advantage with fee-for-service Medicare costs. The agency
projects the rule will enable it to reclaim $4.7 billion in overpayments from
2023 to 2032.

Humana alleges that CMS violated the Administrative Procedure Act of 1946 and is
asking the court for an injunction to block the regulation. CMS declined to
comment.



“The final rule will alter the Medicare Advantage program’s actuarial
foundations, with unpredictable consequences for Medicare Advantage
organizations and the millions of seniors who rely on the Medicare Advantage
program for their healthcare,” according to Humana's complaint.



Humana is the second-largest Medicare Advantage carrier, with 5.8 million
enrollees. Humana and market leader UnitedHealth Group collectively cover 47% of
Medicare Advantage enrollees, according to CMS data compiled by KFF.

The CMS regulation aims to discourage health insurance companies from
manipulating Medicare Advantage risk adjustments to maximize revenue. Medicare
Advantage plans receive flat monthly payments for each enrollee, which are based
on their risk scores. The agency then reviews a selection of claims and risk
codes to determine if they are consistent with patients' medical records or if
evidence exists that insurers engaged in upcoding, and extrapolates those
findings across carriers' entire Medicare Advantage memberships.



Health insurers collected an estimated $17 billion in Medicare Advantage
overpayments last year, according to the Medicare Payment Advisory Commission,
which makes policy recommendations to Congress. The Justice Department is suing
Humana and other Medicare Advantage carriers over allegations they exaggerated
expenses to generate excess payments.

In its new lawsuit, Humana alleges that CMS does not have the statutory
authority to claw back payments from past years and that it neither adequately
justified its plan to eliminate the fee-for-service adjuster from
risk-adjustment data validation, or RADV, audits nor provided sufficient time
for public comments on the proposed rule.

Health insurance companies maintain that the fee-for-service adjuster is
critical to ensuring payments to private Medicare carriers are actuarially
equivalent to the traditional program.

“Humana’s annual bid certification explicitly relied on CMS’ public commitment
to account for the different documentation standards used to calculate Medicare
Advantage payment rates and conduct RADV audits before recouping any payments
associated with diagnosis codes that were not documented in enrollees’ medical
records,” Humana wrote in its lawsuit.

Medicare Advantage insurers are set to receive a 1.12% cut to their base
payments next year under a final rule published in March that also makes
significant changes to the star ratings quality bonus program.



RELATED ARTICLES

CMS finalizes RADV rule, leaves MA plans on the hook for billions
More MA insurer audits mean more scrutiny on providers
CMS 2024 Medicare Advantage rate notice tweaks risk adjustment program
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