Humana Inc., a major player in the healthcare and insurance sectors, has agreed to a $90 million settlement to resolve allegations of Medicare fraud. The False Claims Act lawsuit in question was filed in 2016 by a whistleblower on behalf of the government and involved accusations that Humana engaged in fraudulent activities related to the Medicare Part D Prescription Drug Program. Medicare Part D is an optional drug program wherein private insurance companies provide prescriptions to Medicare patients. These plans are private health insurance alternatives to traditional Medicare intended to offer a more comprehensive range of services. 

To participate as a private insurance company, CMS requires companies to cover a minimum portion of drug costs, with the remainder being paid by the government. The lawsuit claims that from 2011 to 2017 Humana submitted bids promising to pay the required minimum, while intentionally planning to cover less. The government alleges that this resulted in the government and beneficiaries paying millions more than intended by the Part D plans. Whistleblower Steven Scott was a former actuary at Humana who claimed that, despite Humana accurately predicting the cost of its Part D Walmart Plan contributions, it would instead use unsupported numbers for its bids resulting in significant CMS overpayments pocketed by Humana. 

The $90 million settlement is the first of its kind between the government and any insurer regarding allegations of fraud within Medicare’s prescription drug contracting process. Humana stated that “[w]hile we are confident in our position and expected to prevail at trial, we have made the decision to enter into a settlement agreement without admitting any wrongdoing to avoid the uncertainty, distraction, inconvenience, and expense of a lengthy jury trial[.]” This lawsuit underscores the growing scrutiny of Medicare Advantage plans and serves as a reminder for companies to remain diligent in their healthcare billing practices. 

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with the False Claims Act, government investigations, and other enforcement actions. If you need assistance with such a matter, please contact us today.