Humana has agreed to pay $90 million as part of a settlement in a whistleblower lawsuit, which was filed by one of Humana’s former actuaries, that accused the insurer of fraud in Medicare’s in Medicare’s prescription drug benefit.
According to Phillips and Cohen, the law firm that is representing the whistleblower, this marks the first settlement to resolve allegations of fraud in Medicare’s prescription drug contracting process.
Despite the settlement, Humana denies the allegations.
Whistleblower Steven Scott filed the lawsuit back in 2016 and alleged that Humana was inflating their costs in order to get a higher paying contract with the government, however Humana was providing below the required level of coverage and pocketed the difference, according to Healthcare Dive.
By doing so, Humana allegedly pocketed hundreds of millions of dollars, as a profit, per the lawsuit.
Additionally, the lawsuit alleged that Humana maintained two sets of books to perpetuate the scheme, which ended in 2017 once the government started investigating the case.
Humana and Scott reached a settlement prior to going to trial, with the company settling without admitting any wrongdoing and to avoid the uncertainty of going through a long trial, and the associated costs.
“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,” a Humana spokesperson said, per Healthcare Dive.
