Justice Department investigating Humana billing practices

Humana Inc. reports that it is cooperating with a Department of Justice inquiry into whether it exaggerated the severity of elderly patients' illnesses to generate higher Medicare reimbursements.

The  Louisville, KY-based firm disclosed the Justice Department's “information request” in its annual report filed Feb. 18 with the Securities and Exchange Commission, according to a Center for Public Integrity statement.

The department is reportedly focusing on Medicare Advantage plans, which pay participating providers a set fee monthly for each patient based on a complex risk-scoring formula that increases the sicker the patients are said to be. At issue are MA providers' billing practices and fraud controls, as well as Humana's use of home health assessments that federal investigators say artificially inflate risk scores and reimbursements.

The Center for Public Integrity said it has previously reported on a number of whistleblower lawsuits against the company, one of which alleged a Humana medical center diagnosed “abnormally high” numbers of patients with diabetes with weak evidence to support the diagnoses. Humana has denied any wrongdoing.

Participating providers in the Medicare Advantage program, a managed care network, have come under government scrutiny for upcoding diagnoses to extract higher reimbursement than other Medicare fee-for-service providers do. The president's 2016 fiscal budget would significantly cut federal funding to the program.