America's Benefit Specialist October 2023

HUMANA SUES GOVERNMENT TO BLOCK MEDICARE CLAW-BACK RULE

Humana has sued the U.S. government to block a Biden administration policy allowing Medicare to claw back bil lions of dollars from insurers for overcharges. The lawsuit in federal court said CMS “did not even try” to justify its more aggressive approach toward determining whether private Medicare Advantage plans for people aged 65 and older were overpaid. Humana objected to a rule announced in January to let the government recoup payments when audits uncover charges for diagnoses that are not in patients’ medical records. The insurer said the rule, which would apply ret roactively, was “arbitrary and capricious,” and threatened “unpredictable consequences for Medicare Advantage organizations and the millions of seniors who rely on the Medicare Advantage program for their healthcare.” The Biden administration has said the crackdown could help the government collect as much as $4.7 billion over

10 years. Congress authorized the plans in 2003 as a means to encourage better healthcare at lower cost. In announcing the rule, HHS Secretary Xavier Becerra called it “long overdue,” citing federal watchdogs and out side experts who for many years had lamented Medicare’s failure to crack down on overcharging. The rule relates to a system of “risk adjustment” in which payments would be lower for healthier patients who might be expected to incur lower medical bills. But Humana said CMS had more than a decade ago rejected the documentation standards required under the rule, and its about-face was unfair to insurers that relied on its prior practices. Though Humana is based in Louisville, Kentucky, it filed its lawsuit with the U.S. District Court in the Northern Dis trict of Texas, which has in recent years been sympathetic toward some challenges to federal rulemaking.

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