Humana Pays $90M to Settle Claims of ‘Aggressive’ Two-Book Strategy

In what whistleblower attorneys say is a novel case, Humana Inc. has agreed to pay $90 million to settle False Claims Act allegations related to the Medicare Part D contracting process. The case was brought by a former employee who alleged Humana engaged in a “reverse-engineering” scheme to submit actuarially equivalent bids to CMS for Prescription Drug Plan (PDP) business that were based on inflated assumptions about the use of preferred pharmacies by low-income subsidy (LIS) members. Humana did not admit wrongdoing and stands by the merit of its assumptions. 

The suit, U.S. ex rel. Steven Scott v. Humana Inc. (3:18-CV-00061-GNS-CHL), was originally filed in January 2016 in the U.S. District Court for the Central District of California. It remained under seal until 2017, after the U.S. Dept. of Justice (DOJ) declined to intervene.