Whistleblower lawsuit accuses Humana of billing fraud in Florida, says misleading data in medical records put patients at risk

By Fred Schulte

Center for Public Integrity

Louisville-based Humana Inc., which operates some of the nation’s largest private Medicare health plans, knew for years of billing fraud at some South Florida clinics, but did little to curb the practice even though it could harm patients, a doctor alleges in a newly unsealed whistleblower lawsuit.

The suit was filed by South Florida physician Mario M. Baez. It accuses Humana and his former business partner, Dr. Isaac K. Thompson, of engaging in a lucrative billing fraud scheme that lasted years. The suit also names three other Palm Beach County doctors, two medical clinics and a doctors’ practice group as defendants. The suit was filed in October 2012, but remained under a federal court seal until Feb. 26.

Humana had no comment. “As a matter of long-standing company policy, Humana does not comment on pending litigation,” said company spokesman Tom Noland.

Thompson, a Delray Beach doctor, was indicted early last year on health care fraud charges stemming from similar allegations. He had pleaded not guilty, but last week indicated he would change his plea, and was to appear in federal court in Fort Lauderdale on Friday, March 4.

The Baez case is likely to bring fresh scrutiny to Humana, which has more than 3 million elderly patients in its Medicare Advantage plans nationwide. That business was a major incentive for Aetna Inc. to buy Humana, a purchase still pending regulatory approval. Aetna says the merged company's government-related business will be based in Louisville.

The Baez suit targets a billing formula called a risk score, which is designed to pay Medicare health plans higher rates for sicker patients and less for people in good health. But overspending tied to inflated risk scores has cost taxpayers tens of billions of dollars in recent years, as the Center for Public Integrity reported in a series of articles published in 2014.

Federal officials have struggled for years to stamp out these overcharges, known in health-care circles as “upcoding,” while at least a half-dozen whistleblowers have filed lawsuits accusing Medicare Advantage plans of ripping off the government.

Baez’s case adds a new wrinkle because it alleges that inflating risks scores not only wastes taxpayer dollars, but can also cause a patient to be harmed by improper medical treatment.

Baez said in a letter to the judge in the case, U.S. District Judge Kenneth A. Marra, that treating elderly patients with “multiple ailments” is difficult when you have accurate data, but “when medical records are poisoned with misleading data [from inflated risk scores] it becomes Russian roulette.” Patients aren’t told their risk score and aren’t likely to know if a doctor has exaggerated how sick they are or added bogus medical conditions to their medical records to boost profits, Baez said.

Doctors use a series of billing codes to document patients’ health, including any diseases they have and how severe they are. Medicare Advantage plans report these codes to the government, which calculates a patient risk score and sends off a payment to the health plan.

In Thompson’s case, Humana paid 80 percent of the money it received to the doctor and kept the rest. Prosecutors charged that fraudulent diagnoses submitted by Thompson between January 2006 and June 2013 generated overpayments of $4.8 million.

Baez alleges that Humana encouraged overbilling by providing affiliated doctors with forms that highlighted “more profitable” diagnosis codes they could use for patients. Many were statistically impossible to support, according to the suit, which cited allegedly inflated risk scores in more than three dozen patients.

Humana has acknowledged being the target of investigations into its billing practices, including some involving whistleblowers. So has another large Medicare Advantage plan operated by UnitedHealth Group. Last month, UnitedHealth said it was cooperating with a Department of Justice review of its billing practices, according to a Securities and Exchange Commission filing.

Court filings unsealed in the Baez case confirm that the company faces several similar whistleblower suits, including at least one that remains under court seal. The court records also suggest that the criminal fraud investigation that snared Thompson is not over.


“There are some components of the criminal investigation which remain active,” Assistant U.S. Attorney Mark A. Lavine wrote in a December 2015 court filing. Lavine added that the investigation “continues to move forward aggressively.” Lavine also indicated that two other whistleblower cases have been filed against Humana “in connection with similar allegations at other clinics.”

This story is co-published with NPR. It is part of a series, Medicare Advantage Money Grab.

6th annual Kentucky Health Literacy Summit in Louisville Oct. 7

The 6th Annual Kentucky Health Literacy Summit, "Health Literacy in the Age of the Affordable Care Act," will be held Wednesday, Oct. 7 at the Founder's Union Building on the University of Louisville, Shelby Campus in eastern Jefferson County.

The Summit is hosted by Health Literacy Kentucky and will showcase national health literacy and plain language experts.

Speakers will include: Wilma Alvarado-Little, principal and founder of Alvarado-Little Consulting LLC, which advocates for linguistically and culturally appropriate health services; Craig Blakely, dean of the UofL School of Public Health and Information Sciences; Elizabeth Edghill, refugee health educator and coordinator for Family Health Centers Inc.; Carlos Marin, assistant dean, Community and Cultural Engagement at the University of Kentucky's College of Medicine; Glen Mays, director of the National Coordinating Center for Public Health Services and System Research at UK; Kristen Munro-Leighton, health educator at Family Health Centers; and former journalist Kim Parson, a strategic consultant at Humana Inc.

The summit is targeted toward physicians, physician assistants, pharmacists, psychologists, social workers, health education specialists, dentists, dental hygienists, and extension agents. Continuing education credits are available. Registration fees are $95 or $25 for students. For more information and to register click here: http://www.cecentral.com/live/9828.

Regan Hunt, executive director of Kentucky Voices for Health, leaves for a new position at insurer Humana Inc.

The executive director of Kentucky Voices for Health, a group that worked for the implementation of the Patient Protection and Affordable Care Act, is now working for Humana Inc. as a product development consultant.

Regan Hunt

Regan Hunt switched jobs after working in a way that won her the Consumer Health Advocate of the Year Award by Families USA, which cited her work for expansion of Medicaid in Kentucky and her efforts to increase health coverage under the Affordable Care Act. In her new job, she will be a product development consultant, working on design of benefits for those covered by the Medicaid expansion.

During her time at KVH, Hunt worked with a coalition of more than 200 partners to address the many health care needs of Kentuckians, including access, prevention, quality and value. Hunt said in an interview that she was most proud of  KVH's role in enrolling so many Kentuckians in coverage during 2013-15.

"Kentucky is one of those states that did it right," she said.

Hunt said that she was also proud of the group's collaboration between Gov. Steve Beshear, the state Cabinet for Health and Family Services: "We all worked together and that was an amazing thing ... all working together to make sure that people got the information that they needed and got covered. ... It was a once-in-a-lifetime sort of thing." KVH is not a lobbying group, but many of its members are.

At Humana, Hunt will research the Medicaid expansion landscape in other states to determine what new beneficiaries that population might need or want in a benefits package, beyond what is required by law.

"I am an advocate, probably until the day I die," she said, noting that she will now work as an individual advocate, instead of under the umbrella of KVH, to help people gain access to health coverage. "I've been doing that since I was 22, so it is not something that I am going to give up doing."

Hunt is a native of Pike County, She earned her undergraduate degree at Transylvania University and her Masters in Public Administration degree from the University of Kentucky. She also holds a certificate in health-care management from the University of North Carolina, according to the KVH website.

Feds investigating possibility that Humana overbilled taxpayers for Medicare Advantage; firm says it reported information

Louisville-based "Humana Inc. faces multiple federal investigations into allegations that it overbilled the government for treating elderly patients enrolled in its Medicare Advantage plans, court records reveal." So reports Fred Schulte of the Washington-based Center for Public Integrity, a non-profit, inevstigative news agency.

"The status of the investigations is not clear, but they apparently involve several branches of the Justice Department," Schulte reports, adding that federal prosecutors said in a document filed in March that they expect at least one of the investigations will be completed “in the next few months.”

Federal prosecutors in West Palm Beach have "opened a criminal case involving overbilling allegations that the government says is similar to the Miami investigation," Schulte writes. "Meanwhile, the criminal division of the Justice Department in Washington has reviewed fraud allegations against the company, according to court records. Humana, which insures more than 2 million people through the Medicare Advantage plans, is also the target of two Florida whistleblower civil lawsuits that allege similar overcharges."

Humana spokesman Tom Noland told Schulte that the company has made “several public disclosures about these matters over a long period of time” and “self-reported” them several years ago, but “Humana to our knowledge is not the subject of any criminal investigation.” (Read more)

State and school employees and retirees hit obstacles when seeking mental health treatment; doctor blames Humana

State government and school employees in Kentucky have trouble seeing a psychiatrist because of Humana Inc.'s low reimbursement rates and unrealistic requests for paperwork, an op-ed piece in the Lexington Herald-Leader contends.

Humana manages the Kentucky Employee Health Plan, which has 285,000 current and retired Kentucky workers as members. But those needing mental health services are apparently running into roadblocks, Dr. Jeffrey Tuttle writes:

"Humana dictates the fee, which is often significantly lower than the regional market rate. Humana also requires in-network psychiatrists to submit medical records and documentation so they can determine if an appointment is medically necessary." But many doctors are uneasy doing so "because it jeopardizes confidentiality and leaves major treatment decisions in the hands of any anonymous Humana employee."

Visits to out-of-network providers arte likewise complicated, Tuttle alleges, in large part because Humana only reimburses $69 per visit, though the going rate, according to the Healthcare Bluebook, is $160. That low reimbursement means many more visits to meet the health plan's $800 deductible.

However, visiting in-network providers can be difficult. "Of the 83 active psychiatrists with a primary office in Fayette County (excluding psychiatric residents in training), only 12 work in clinics accepting Humana plans," Tuttle writes. "To make the situation worse, several of these psychiatrists are not accepting new Humana patients." (Read more)

Humana did not respond to a request from Kentucky Health News for comment.

Humana reinvents itself again, to adapt to U.S. health-care reform

Humana, Kentucky's largest corporation, says it is reinventing itself in the wake of the federal health reform law, focusing on becoming a "well-being" company rather than just a provider of health insurance.

Of the notable changes, the Louisville-based corporation that started life almost 50 years ago as a nursing-home company, then ran hospitals, is now back in the business of providing medical care directly, The Courier-Journal's Patrick Howington reports. That change is due to the $790 million purchase of Concentra, which operates occupational and urgent-care clinics (photo of Dr. J. Shawn Standridge and Danny Murphy by C-J's Michael Hayman). Humana Chairman and CEO Michael McCallister said similar purchases in fields like home health and information technology are expected.

Humana is also involved with development of products such as fitness games that can be played online and a water bottle that tells its owner when it's time to rehydrate. The company is also planning to market diabetic supplies to consumers, and is selling research to health-care companies about the effectiveness of certain drugs. "It's a significant change in our strategy," McCallister said.

Part of the change is due to the new health law, which will mean a $136 billion federal cutback in Medicare Advantage, a supplemental coverage program. Humana is the program's second-largest provider with 1.9 million members, and half its revenue comes from the program.

Though Humana laid off 750 Louisville workers early last year, analysts predict the company will weather the changes. Though Medicare Advantage cuts will likely mean there will be a predicted 5 million fewer seniors enrolled in the plan by 2019, other, smaller providers will likely stop offering it. Humana will be there to pick up those lost customers, analysts contend. (Read more)