Humana’s RADV Court Win: What It Means for Medicare Advantage Plans—and What Comes Next

What Was Vacated and Why It Matters

On September 25, 2025, a federal court in Texas vacated the Centers for Medicare & Medicaid Services’ (CMS) 2023 RADV Final Rule, siding with Humana. The decision is a major procedural setback for CMS and reshapes the compliance outlook for Medicare Advantage Organizations (MAOs). While this ruling stops the Final Rule from taking effect, CMS’s broader efforts to expand oversight of MA plans remain underway.

The 2023 RADV Final Rule included two major changes:

• Extrapolation of audit findings beginning with Payment Year (PY) 2018, allowing CMS to apply results from small audit samples across entire MA contracts.

• Elimination of the Fee‑for‑Service (FFS) adjuster, which had previously helped balance differences between MA documentation and traditional Medicare claims.

CMS estimated these changes would generate about $4.7 billion in recoveries over ten years.

The court found that CMS violated the Administrative Procedure Act (APA) by failing to give stakeholders fair notice of a key policy switch: moving from its 2018 proposal, which assumed actuarial equivalence would still apply, to the 2023 Final Rule, which abandoned actuarial equivalence altogether. Because this switch was not clearly signaled, stakeholders were denied a meaningful chance to comment on its implications.  CMS argued that any error in the process was harmless, claiming the Final Rule only clarified existing policy. The court rejected that defense, noting that applying the rule retroactively to audits dating back to PY2018, while also removing the FFS adjuster, created substantial new liabilities for MA plans. These were not minor clarifications but significant departures from prior expectations, and the absence of proper notice rendered the error significant.

What the Ruling Does—and Doesn’t Do

This was a procedural, not substantive, decision. The court did not rule on whether extrapolation or the removal of the FFS adjuster is lawful. Instead, it vacated the rule based on flawed rulemaking. Unless a stay is granted or CMS reissues the rule through proper notice-and-comment procedures, the 2023 RADV framework is not enforceable.

CMS’ Oversight Efforts Continue

Despite the ruling, CMS’ broader audit expansion remains in motion. In May 2025, the agency announced plans to audit every eligible MA contract annually and clear the backlog from PY2018–PY2024. Public documents describe record samples increasing from ~35 to as many as 200 per plan, supported by a dramatic coder ramp-up—from ~40 to nearly 2,000 reviewers.

CMS has cited persistent overpayment concerns and coding intensity effects that inflate MA payments. MedPAC estimates coding intensity will raise MA payments by roughly $40 billion in 2025 alone. These pressures will continue to drive oversight, regardless of the court’s ruling.

What MA Plans Should Do Now

• Continue RADV Audit Activities - Medicare Advantage plans should continue RADV audit activities in line with pre-ruling protocols. Record collection, submission, and internal validation processes should proceed without interruption, especially where CMS deadlines remain in effect. The court’s decision does not automatically halt operational audits, nor does it invalidate CMS’s authority to conduct them.

• Model Financial Exposure Under Multiple Scenarios -  Plans should build side-by-side projections for PY2018+ audits—with and without extrapolation. This will help quantify potential exposure under each scenario and inform strategic decisions around accruals, MA bids, and financial exposure forecasts.

• Track CMS and Legal Developments -  Monitor for a government appeal (due within 60 days), any motion to stay, and interim CMS guidance. If CMS initiates new rulemaking, consider submitting data-driven comments on cost, feasibility, and actuarial alignment.

• Strengthen Internal Oversight Regardless of Rule Status Continue RADV-style reviews of high-risk diagnosis, second-level validations, and provider education. Proactive compliance will mitigate future risk.

Final Thoughts

The court’s decision halts CMS’ 2023 RADV rule on procedural grounds, but it does not end the agency’s push for deeper MA oversight. Plans should stay engaged, prepare for multiple audit scenarios, and be ready to respond if CMS returns with a revised, procedurally sound rule.

How Rebellis Can Help

Strategic Audit Planning We guide MA plans in maintaining compliant RADV audit workflows—ensuring record collection, submission, and validation continue seamlessly while aligning with current legal boundaries.

Exposure Modeling & Forecasting Our team builds customized financial exposure models for PY2018+ audits, comparing extrapolated and sample-only scenarios. We help you revisit accruals, MA bids, and forecast impacts with precision.

Regulatory Monitoring & Interpretation We track CMS guidance, legal developments, and appeal activity daily, translating complex updates into actionable insights for your compliance and executive teams.

Internal Risk Controls & Readiness We assess and strengthen your RADV-related controls, including diagnosis coding reviews, provider education, and second-level validations so you’re prepared no matter how CMS revises its approach.

Commentary & Advocacy Support If CMS reopens rulemaking, we help draft data-driven public comments that reflect your operational realities, actuarial concerns, and financial impact—ensuring your voice is heard.

As your strategic partner, we’re here to help you navigate this evolving landscape, ensuring compliance, protecting financial integrity, and positioning your organization for long-term success