Humana facing new federal scrutiny over private Medicare plans

Giant health insurer Humana, Inc. faces new scrutiny from the Justice Department over allegations it has overcharged the government by claiming some elderly patients enrolled in its popular Medicare plans are sicker than they actually are.

The Louisville, Kentucky-based company disclosed the Justice Department’s recent civil “information request” in an annual report filed with the Securities and Exchange Commission on Feb. 18. The company noted that it is cooperating with authorities.

“We continue to cooperate with and voluntarily respond to the information requests from the Department of Justice and the U.S. Attorney’s Office,” Humana wrote.

The privately run Medicare Advantage plans offer seniors an alternative to standard Medicare, which pays doctors for each service they render. By contrast, under Medicare Advantage, the health plans are paid a set fee monthly for each patient based on a complex formula known as a risk score. Essentially, the government pays higher rates for sicker patients and less for those in good health.

But overcharges related to inflated risk scores, intentional or not, have cost taxpayers billions of dollars in recent years, as the Center for Public Integrity reported in a series published last year.

The Center first disclosed multiple investigations of the Humana Medicare Advantage plan last May based on records filed by the U.S. Attorney’s Office in a Miami civil suit.

But Humana’s SEC disclosure offers fresh details into the wide scope of the Justice review, indicating it is taking aim at a range of common Medicare Advantage billing practices and fraud controls, as well as Humana’s use of home health assessments of patients in its plans. The industry argues these “house calls” improve the health of elderly patients, but federal officials have been concerned that the primary objective is to raise risk scores and revenues.

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Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.