Humana Dishes Out $90 to Settle Whistleblower Suit

According to the attorneys defending the whistleblower in the case, Humana has reached an agreement to pay $90 million in order to resolve a False Claims Act action that it has been involved in concerning its Medicare Part D contracts.

As per the allegations made in the complaint, presented by Phillips & Cohen, the insurer put in bogus bids to the federal government  in order to acquire Part D contracts between 2011 and 2017. As a result, the Centers for Medicare and Medicaid Services incurred huge overcharges.

According to a news statement issued by Phillips & Cohen, this was the very first instance of its sort to address charges of fraud in the process of negotiating for Part D contracts.

As part of the Medicare Part D program, insurers are obligated by law to cover a certain amount for prescription pharmaceuticals. The remaining expenses may be borne by the government or the beneficiaries themselves, depending on their individual circumstances. During the process of bidding, payers provide a description of the benefits they want to provide and make certain that those benefits match the requirements.

It is claimed in the case that Humana made statements in its bids that it would provide the required level of coverage; nevertheless, behind the scenes, the company planned to pay less. As a result, both the federal government and the enrollees were unaware that they were being charged more than their fair share.

According to the assertions by the whistleblower, who is a former actuary at Humana and is named Steven Scott, the firm produced accurate forecasts internally regarding the expenses that would be associated with its Part D program by Walmart. However, it constructed bids based on other numbers that were exclusively utilized in this procedure.

As per reports, the firm stopped the practice once it was hit by a civil examination demand by the government. 

“The Part D program depends on insurance companies paying their minimum share of drug costs. We argued that Humana shirked its responsibility by telling the government that its plan would cover drug costs that Humana did not actually plan to cover,” stated Claire Sylvia, a whistleblower attorney involved with the case. She added that the complaint dealt with how the beneficiaries, as well as the government, ended up paying hundreds of thousands of dollars more than intended by the Congress, while Humana kept all that money under the disguise of ‘savings’.

After a federal district court declined to grant further time for the investigation, the Justice Department made the decision not to participate in the matter. In spite of the fact that the case was scheduled to go to trial, a settlement was concluded prior to the trial even beginning.