Humana Inc. Overcharged Medicare Nearly $200 Million, Federal Audit Finds : Shots

Medicare Advantage, a rapidly growing private alternative to Original Medicare, has enrolled more than 26 million people. Humana Inc. is one of the largest of these insurers. Medicare Advantage, while popular with seniors, has received multiple government researches. Pablo Martinez Monsivais / AP Hide caption

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Pablo Martinez Monsivais / AP

Medicare Advantage, a rapidly growing private alternative to Original Medicare, has enrolled more than 26 million people. Humana Inc. is one of the largest of these insurers. Medicare Advantage, while popular with seniors, has received multiple government researches.

Pablo Martinez Monsivais / AP

A Humana Inc. senior health plan in Florida wrongly raised nearly $ 200 million in 2015 by overestimating how sick some patients were, according to a new federal audit seeking to reclaim the money.

The health and social services Inspector General’s Office A final repayment recommendation would be “by far the largest” exam penalty ever imposed on a Medicare Advantage company, said Christopher Bresette, HHS assistant regional inspector.

“These [money] must return to the federal government, “he said in an interview.

Humana sharply denied the results of the exam, which was due to be released Tuesday. A company spokesman said Humana would work with Medicare officials “to resolve this review,” noting that the recommendations “are not definitive and Humana has the right to appeal.”

Medicare Advantage, a rapidly growing private alternative to Original Medicare, has enrolled More than 26 million people, according to America’s Health Insurance Plans, an industry trading group. Based in Louisville, Kentucky, Humana has approximately 4 million members and is one of the largest of these insurers.

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Although Medicare Advantage is popular with seniors, it has been the goal of several governments Investigations, Department of Justice and whistleblower complain and Medicare Audits As a result, some plans increased their government payments by exaggerating the severity of the illnesses they were treating. A 2020 report It is estimated that the improper payments for the plans last year were over $ 16 billion.

Efforts to recoup even a tiny fraction of the overpayments in recent years have stalled due to strong industry opposition to government auditing methods.

Now the OIG is conducting a series of audits that could, for the first time, test health plans for reimbursement of tens of millions of dollars or more to Medicare. OIG plans to publish five to seven similar audits within the next year or two.

The Humana audit, conducted from February 2017 to August 2020, linked overpayments to conditions that pay for health plans because their treatment is costly, such as: B. some cases of cancer or diabetes with serious medical complications.

The examiners examined a random sample of 200 health records to ensure that the patients had the diseases that the health plans were paid for to treat, or that the conditions were as severe as the health plan claimed.

For example, Medicare paid $ 244 a month – or $ 2,928 a year – for a patient who had serious complications from diabetes. However, the medical records provided by Humana failed to confirm that diagnosis, which means the health plan should have received $ 163 less per month for patient care or $ 1,956 for the year, according to the audit.

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Similarly, in 2015 Medicare overpaid $ 4,380 to treat a patient whose larynx cancer was audited to have corrected. In other cases, however, auditors said Medicare underpaid Humana by thousands of dollars because the plan presented incorrect billing codes.

In the end, the auditors said Medicare overpaid Humana by $ 249,279 for the 200 patients whose medical charts were carefully examined in the sample. Based on these 200 cases, the auditors used a technique called extrapolation to estimate the prevalence of such billing errors across the health plan.

“As a result, we have estimated that Humana received net overpayments of at least $ 197.7 million for 2015,” the audit said. Humana’s guidelines for preventing these errors are “not always effective” and need to be improved.

According to the audit, the OIG informed Humana of its results in September 2020. A final decision on how to raise the funds rests with the Centers for Medicare & Medicaid Services (CMS), who operate Medicare Advantage. Under federal law, the OIG is responsible for identifying waste and mismanagement in federal health programs, but can only recommend repayment. CMS had no comment.

Although controversial, extrapolation is widely used in medical fraud investigations – with the exception of Medicare Advantage investigations. The industry has been criticizing the extrapolation method since 2007 and thus largely Accountability avoided for ubiquitous billing errors.

Industry protests aside, OIG officials are confident that their advanced testing tools will stand up to scrutiny. “I think what we have here is solid,” said OIG official Bresette.

Michael Geruso, an associate professor of economics at the University of Texas-Austin who researched Medicare Advantage, said extrapolation “makes perfect sense” as long as it is based on a random sample.

“It appears that this is a healthy move by the OIG to protect the US taxpayer,” he said.

The OIG first used the extrapolation technique in February exam from Blue Cross and Blue Shield of Michigan, which uncovered overpayments of $ 14.5 million for 2015 and 2016. In response, Blue Cross said it would take steps to track down payment errors from previous years and refund $ 14.5 million. Blue Cross spokeswoman Helen Stojic said the trial “is still pending”.

But Humana, with a lot more money on the line, is fighting back. Humana “takes great pride in what the company believes is their industry-leading approach” to ensuring proper billing, wrote Sean O’Reilly, vice president of the company, in a December 2019 letter to the OIG approving the audit was blown up.

O’Reilly wrote that Humana “has never received any feedback from CMS that its program was flawed in any way”.

The nine-page letter argues that the test “reflects misunderstandings about certain statistical and actuarial principles, as well as legal and regulatory requirements”. Humana’s request for repayment of the money “would constitute a serious departure from the legal requirements imposed by the [Medicare Advantage] Payment model, “said the company.

Humana convinced the OIG to save about $ 65 million from their original estimate of the overpayment. In 2015, Medicare paid the plan approximately $ 5.6 billion to treat approximately 485,000 members, mostly in South Florida.

Humana is not the only one who rejects the audits.

AHIP, the branch trading group, has been around for a long time opposite Extrapolating from payment errors, and in 2019 called a CMS proposal to start with, “fatally flawed”. The group did not respond to requests for comment.

Health industry advisor Richard Lieberman said insurers remain “strongly opposed” and would likely go to court to try to circumvent fines amounting to about several million dollars.

Lieberman noted that CMS “waffled” in deciding how to protect taxpayers’ money because Medicare Advantage plans have grown rapidly and cost taxpayers more than $ 200 billion a year. CMS says it’s not finished yet its own audits from 2011 that are years overdue.

The dispute has been largely invisible to patients not directly affected by overpayments into the plans. Many seniors sign up because Medicare Advantage provides benefits not included in the original Medicare and may cost them less out of pocket, although it limits their choice of doctors.

However, some critics argue that inaccurate medical records carry the risk of improper treatment. Dr. Mario Baez, a doctor from Florida and Whistleblowersaid seniors “can be put at risk” by incorrect information in their medical records.

Kaiser Health News is an editorially independent newsroom and program of the Kaiser Family Foundation and not affiliated with Kaiser Permanente.

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