Appeals Court Heard Arguments on Medicare Advantage Rules
The Fifth Circuit heard a challenge to federal audit rules brought by Humana against the government.
Updated on Oct. 5, 2026 in Healthcare
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A three-judge panel of the U.S. Court of Appeals for the Fifth Circuit heard oral arguments in a lawsuit concerning Medicare Advantage audit standards. The case follows a 2025 ruling that invalidated the Risk Adjustment Data Validation (RADV) rule.
Why it matters
The legal battle centers on whether federal regulators followed proper notice and comment procedures when finalizing auditing protocols. A definitive ruling could reshape how the Department of Health and Human Services oversees oversight of the private insurance market.
Humana, the second largest provider of Medicare Advantage plans, is challenging the Department of Health and Human Services over audit protocols. The case specifically targets the final rule for auditing risk adjustment data.
The players
Humana
Humana is a major U.S. health insurance company that currently ranks as the second largest provider of Medicare Advantage plans.
Department of Health and Human Services
The Department of Health and Human Services is the federal agency responsible for overseeing national health programs including Medicare and Medicaid.
U.S. Court of Appeals for the Fifth Circuit
The U.S. Court of Appeals for the Fifth Circuit is a federal appellate court that hears challenges to lower court rulings from parts of the United States.
The details
Humana argues that the final RADV rule diverged significantly from the version originally proposed by regulators. The insurer maintains that stakeholders were denied the legal opportunity to comment on the changes, which the industry claims are financially detrimental.
Timeline
Humana filed the original lawsuit against the government in 2023.
A federal judge invalidated the RADV rule in September 2025.
The Department of Health and Human Services appealed that ruling in November 2025.
The Fifth Circuit court heard oral arguments on October 5, 2026.
Market Landscape
This litigation highlights ongoing friction between major insurers and federal regulators over the Medicare Advantage Risk Adjustment Data Validation (RADV) rule. The outcome will define the level of oversight the government maintains over private plans participating in the national Medicare program.
The case concerns the internal auditing of private Medicare plans, which may influence long-term plan costs and availability for beneficiaries. There are no immediate changes to existing coverage or premiums for current policyholders resulting from these court arguments.
The takeaway
Legal challenges regarding federal rulemaking can create significant uncertainty for large health insurers operating in regulated spaces. Stakeholders must wait for the Fifth Circuit panel to decide if the government adhered to necessary administrative procedures for the RADV rule.
Further reading
Learn more about the federal oversight of the industry in the Healthcare section.
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Should the federal government hold private Medicare Advantage insurers to strict regulatory audit standards?
