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

  • Aug 23, 2024

    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.  

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  • Lauren Flynn Kelly

    Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.

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