We continue to hear about inappropriate and sometimes fraudulent behavior on the part of insurance companies offering Medicare benefits. Yet, rarely, do these companies get caught, prosecuted and penalized. Recently, Humana settled a whistleblower lawsuit brought under the False Claims Act, alleging Humana overcharged the federal government, reports Rebecca Pifer for Healthcare Dive.
It’s hard to believe that this whistleblower accusation reflects a one-off fraudulent act by a Medicare insurer. More likely, it indicates that abuses are happening. If you want to get a sense of the scope of health insurer abuses, check out violationtracker.org, which shows that UnitedHealthcare alone has paid more than $2 billion in penalties since 2000. But, it’s costly and resource-intensive to fight the health insurers, so they can get away with a lot.
In this case, Humana is paying a $90 million settlement. You have to wonder whether the activities in which it engaged generated profits far larger than this penalty.
Insurers provide prescription drug benefits under Medicare Part D to more than 54 million people with Medicare. The Part D benefit has improved so that, in 2025, people with Medicare will spend no more than $2,000 out of pocket on their medications. But, the Part D insurers can still steer them to more costly medications, away from generic drugs and, in some cases, charge them more in copays than the full cost of their drugs if they went to Costco.
Part D insurers are obligated contractually to cover a range of drugs. Still, they are able to get around the requirements and maximize their revenues at the expense of their enrollees. In the Humana suit, the whistleblower claimed that, over a six-year period ending in 2017, Humana reported that its Part D coverage costs were higher than they actually were, overcharged the government, and provided hundreds of millions of dollars less coverage to its enrollees than legally required.
To undertake the fraud, the whistleblower explained that Humana kept two sets of books. Yes, that’s right, the two-sets-of-books scam does not only happen in the movies! For unknown reasons, the Department of Justice did not intervene in the suit.
A Humana spokesperson sent an email to Healthcare Dive claiming that “Humana firmly believes that the actuarial assumptions in its prescription drug plan were reasonable and in full compliance with all laws and regulatory requirements, and that the plaintiff’s claims in the case are without merit.”
The majority of False Claims Act judgements and settlements last year were in the health care industry. They are happening at record levels. Meanwhile, policymakers claim concern about growing Medicare fraud. You’d think this would be a signal to Congress that the government should take the insurers out of the Medicare program and guarantee everyone government-administered health care. It’s not.
Here’s more from Just Care:
- Justice Department going after Medicare Advantage fraud
- Medicare fraud: Traditional Medicare v. Medicare Advantage
- Fraudsters banned from the Medicare program circumvent the ban
- Medicare Advantage: Combating fraud is a challenge because there’s no data on denied claims
- Whistleblowers expose fraudulent Medicare Advantage billing practices
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