Humana Pays $90 Million in Medicare Fraud Settlement

Pharmaceutical manufactures collect more than $300 billion annually in domestic revenue. Bringing down the cost of medication has long been a goal, but even attempts to moderate prices can lead to fraud. When a major health insurance company teamed up with the country’s largest retailer to provide prescription drug benefits, a former actuary for the insurer claimed that they were overstating their costs. Now, that company is paying an eight-figure settlement to the government, and the whistleblower could receive a substantial sum as well. 

The case stems from an allegation that that Humana, through its Walmart Rx Prescription Drug Plan (PDP), submitted false claims to the government, resulting in inflated payments from the Medicare Part D program. Steven Scott, the former actuary, filed a lawsuit on the government’s behalf in an attempted to hold Humana accountable for overstating their drug costs. While admitting no fault, the insurer paid a $90 million settlement to have the case against it dismissed.  

Scott brought the case forward under the False Claims Act, a law that allows private citizens to file qui tam lawsuits when that citizen believes they have uncovered evidence of fraud against the government. As compensation for his work, Scott is eligible to receive a monetary payment worth millions of dollars, based on the settlement amount. 

Medicare Part D, which covers prescription drug costs for beneficiaries, is vulnerable to fraud due to the complexity of the program and the large number of claims processed each year. Fraudulent billing, misrepresenting drug costs and other dishonest practices can lead to billions in losses for federal systems such as Medicare and Medicaid. Often, it requires inside knowledge like Scott’s to construct a persuasive case against a large company engaging in deception.  

Though the dollar values might not be as high in other cases of Medicare and Medicaid fraud, workers at all levels of the healthcare industry might aware of improper billing practices or other illegal behavior. When you think you’ve identified someone trying to cheat a government medical program, you too could be eligible for a payment if funds are recovered through judgment or settlement. 

The accomplished attorneys at Kardell Law Group have a long track record of achieving strong results for whistleblowers in the medical field and other industries. Reach out to us if you’ve noticed fraudulent activity on the job.