The Justice Department filed a motion to transfer or dismiss Humana's lawsuit over Medicare Advantage audits.
The insurance company in September filed suit in the U.S. District Court for the Northern District of Texas' Fort Worth division, alleging the Centers for Medicare and Medicaid Services did not go through the appropriate regulatory processes and lacked legal standing when finalizing the risk-adjustment data validation rule earlier in the year.
The updated rule allows regulators to extrapolate Medicare Advantage overpayments they identify from plan year 2018 onward. It also axes an adjustment the agency previously used to align private Medicare plans with the traditional, fee-for-service program. CMS has projected the rule will enable it to reclaim $4.7 billion in improper payments over the next decade.
Related: More MA insurer audits mean more scrutiny on providers
Judge Reed O'Connor, one of the judges presiding over the Fort Worth division of the court, previously struck down portions of the Affordable Care Act.
The lawsuit should be transferred to the Dallas division of the Texas federal court because that is where Humana’s local subsidiary is headquartered, according to the Justice Department’s filing Friday. If it is not transferred, the complaint should be dismissed, the Justice Department wrote.
Additionally, CMS has not yet begun auditing Medicare Advantage insurers' 2018 data, the Justice Department wrote. It argued in the motion that because the new policy has not yet affected Humana and it is unclear whether it will, the insurer lacks legal authority to make a claim.
"Possible future audit demands do not provide standing," the Justice Department wrote.
Humana, the Justice Department and the Health and Human Services Department did not immediately respond to interview requests.
Health insurers collected an estimated $17 billion in Medicare Advantage overpayments last year, according to the Medicare Payment Advisory Commission, an independent advisory group that makes policy recommendations to Congress. The Justice Department is separately suing Humana and other Medicare Advantage carriers over allegations they exaggerated expenses to generate excess payments.
