Humana Settles Medicare Fraud Case for $90 Million

Humana Settles Medicare Fraud Case for $90 Million

Introduction

Louisville-based Humana has agreed to pay $90 million to settle a whistleblower lawsuit alleging Medicare drug fraud under the False Claims Act.

The lawsuit, filed in California, accused the healthcare company of submitting fraudulent bids to the Centers for Medicare & Medicaid Services (CMS) for Medicare Part D prescription drug contracts between 2011 and 2017.

According to the lawsuit, Humana significantly overcharged the federal government by using two sets of financial records—one for its bids to CMS and another for internal purposes, which accurately reflected the company’s actual anticipated costs. The whistleblower, a former Humana actuary, claimed the company knowingly based its bids on inflated numbers that consistently favored Humana by hundreds of millions of dollars. This scheme allegedly affected the company’s Part D "Walmart Plan."

The whistleblower lawsuit, filed in 2016, also claimed Humana adjusted its practices after the government launched an investigation in 2017. The case was settled just before going to trial, marking the first resolution of fraud allegations related to the Part D contracting process.

The attorney representing the whistleblower stated that Humana's actuaries had prepared different financial predictions for its internal use and the government’s bidding process. Humana has not admitted liability in the settlement but agreed to the payout to resolve the claims.