Federal Appeals Judges Reject HHS Arguments in Humana Medicare Advantage Audit Lawsuit

Federal appeals judges on Monday rebuked the Health and Human Services Department's arguments in a hearing on Humana's lawsuit challenging a new Medicare Advantage audit rule.

Humana, the nation's second-largest Medicare Advantage insurer, sued in 2023 claiming the final risk adjustment data validation (RADV) rule differed substantially from the proposed version and that the agency failed to give stakeholders adequate notice or opportunity to comment, which it said would increase audit costs.

A district court had already struck down the rule in September 2025, and HHS appealed that decision in November. During the oral arguments, the three-judge panel of the Fifth Circuit questioned the administration's justification for the rule change and highlighted concerns that the rule could harm insurers.