Judge vacates Medicare Advantage audit rule in win for industry

Dive Brief:

A federal judge has thrown out a Biden-era rule that would have clawed back billions of dollars in overpayments from Medicare Advantage insurers in a major win for the industry.

On Thursday, Judge Reed O’Connor of Texas’ Northern District vacated the Medicare Risk Adjustment Data Validation, or RADV, rule , determining that the CMS didn’t properly notify the industry about the changes in violation of the Administrative Procedures Act.

The ruling complicates the CMS’ plan to beef up audits of MA payers and more broadly crack down on overpayments in the privatized Medicare program.

Dive Insight:

CMS finalized a new methodology for calculating payment recoveries from MA audits in January 2023.

The rule allowed regulators to sample a small number of MA members to find unsup