Humana allegedly overcharged the federal government by nearly $200 million for submitting documentation that inaccurately showed some of its Medicare Advantage members were sicker than they actually were in 2015, according to an audit conducted by the HHS Office of Inspector General.
OIG is recommending Humana return $197.7 million and improve its policies to prevent such overpayments in the future. The watchdog said the errors occurred because Humana's policies to catch and prevent such overcharges "were not always effective," according to the audit released Monday.
The federal government pays MA organizations monthly in order for them to deliver coverage to seniors. The sicker the member, the more money an MA plan stands to receive from CMS. Audits are conducted to make sure health plans are not upcoding diagnosis codes, or making members appear sicker than they actually are in order to receive additional funds.
OIG admits its request for $197.7 million is actually less than the $263.1 million that it originally sought in a previous draft report.
Humana disagreed with the original findings and recommendations, and questioned HHS' sampling and methodologies. HHS took those comments into consideration along with additional medical record documents provided by Humana and revised the alleged overpayment to $197.7 million.
Medicare Advantage enrollment has grown significantly over the past decade. Last year, nearly 40% of all Medicare beneficiaries were in an MA plan, Kaiser Family Foundation reported.
Spending in the program is enormous. In 2019, MA plans covered about 23 million seniors at a cost of $264 billion. A large driver of improper payments in the program is inaccurate risk-adjusted payments, HHS OIG found in a recent report.
A principal deputy inspector general of HHS OIG raised concerns about organizations gaming the system in order to collect more funds. A recent report found that the federal government paid billions it shouldn't have due to improper billing.