Humana overcharged Medicare nearly $200M, inspector general finds

Health insurer Humana failed to comply with some federal coding requirements, resulting in overpayments of $197.7 million, according to an inspector general's report released April 20.

Under the Medicare Advantage program, CMS makes monthly payments to organizations according to a system of risk adjustment determined by the health status of each enrollee. According to the federal audit, Humana failed to submit some diagnosis codes to CMS for use in the risk adjustment program. 

For Humana, the inspector general sampled 1,525 enrollees' hierarchical condition category score, the risk score used to calculate how healthy someone is to determine future healthcare costs. The inspector general said that 1,322 of the 1,525 sampled risk scores were supported in the medical records and validated, but 203 were unvalidated and resulted in overpayments. 

As a result of the alleged errors, Humana received at least $197.7 million in net overpayments for 2015. The inspector general also said that Humana's policies to prevent these errors "were not always effective" and need to be improved.

The inspector general recommended that Humana refund $197.7 million in overpayments to CMS and work to improve its policies to ensure compliance with federal requirements for diagnosis codes. 

The audit was released to Humana last year, but Humana disagreed with the inspector general's findings and its recommendations. Humana provided more medical record documentation and questioned the audit methodology. After reviewing the insurer's comments, the inspector general revised the amount in overpayments alleged in the first document from $263.1 million to $197.7 million, but maintained its recommendation for Humana to improve its policies. 

A Humana spokesperson told Becker's Hospital Review it is continuing to review the inspector general report, but noted it "does not account for many of the substantive concerns Humana has consistently raised with HHS about [risk adjustment data validation] methodology."

"Humana has a comprehensive approach to Medicare risk adjustment compliance. Humana will work cooperatively with CMS, as we did with HHS OIG, to resolve this review. As the report acknowledges, the recommendations do not represent final determinations, and Humana will have the right to appeal if CMS does determine an overpayment exists," a Humana spokesperson said. 

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