The settlement is the first of its kind to resolve allegations of Part D contracting fraud, Phillips & Cohen, the law firm that represented the whistleblower in the case, said in an Aug. 16 news release.
The lawsuit was first filed in federal court in California in 2016. Steven Scott, a former actuary at Humana, alleged the company submitted fraudulent bids to CMS for its Walmart Part D drug plan.
Mr. Scott alleged Humana submitted bids to CMS based on one set of cost assumptions, while it maintained its own internal estimates on cost. Bids Humana submitted to CMS indicated the company would pay 75% of the cost of drugs for members, but it paid as little as 64.5% in practice, with members left to pay the difference, Mr. Scott alleged in court documents.
“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 told Becker’s.
The Justice Department can choose to intervene in False Claims Act whistleblower cases. It did not intervene in this case.
The settlement was reached before the case headed to trial.
“While we are confident in our position and expected to prevail at trial, we have made the decision to enter into a settlement agreement without admitting any wrongdoing to avoid the uncertainty, distraction, inconvenience and expense of a lengthy jury trial,” the spokesperson said.
