The Biden administration has filed a motion asking a Texas court to transfer a lawsuit challenging the final rule on Medicare Advantage risk adjustment—or dismiss it entirely.
Earlier this year, the Centers for Medicare & Medicaid Services finalized a hotly-anticipated rule that made significant changes to MA's risk adjustment data validation audits. While plans did secure some wins in that the new audit methodology would not apply to plan years prior to 2018 and the new model would be phased in over several years, they still objected to the changes.
Humana filed suit to challenge the risk adjustment updates in early September, saying the rule was based upon "shifting justifications and erroneous legal reasoning."
In the Friday filing, the Department of Justice argues that because CMS has not yet begun any audits under the new methodology, much less completed them, it's not clear whether Humana or its Texas plans will be subject to an audit, if that audit would find overpayments or how CMS would tabulate those payouts.
"And in their absence, Humana and its Texas subsidiary cannot establish standing to press their challenge now. Nor are certain aspects of that challenge currently ripe for adjudication," DOJ said. "For those reasons, the complaint should ultimately be dismissed."
However, the agency said that while it believes the case should ultimately be tossed, the courts should transfer it to another jurisdiction. If the case was heard in the Dallas division rather than the Fort Worth division, it would be held where the Texas unit is based.
Should the transfer not occur, the courts should dismiss the case, DOJ said.
"Even if Humana can allege an injury fairly traceable to the RADV Rule—which it cannot—its substantive challenge is unripe," DOJ wrote.