The 10 Biggest Humana Lawsuits in Company History

Humana Inc. went from its 1961 humble beginnings as a nursing home company to one of the largest health insurance firms in the American nation. This company, along with its highly popular Medicare Advantage program, has often found itself at odds with the various government agencies, including federal, as far as some of its ethical and financial practices go. Some of the biggest Humana-related lawsuits in the company’s history have mostly revolved around contract disagreements, financial discrepancies, and labor disputes. So far, the ten that have gained the most amount of attention have done so not simply by their dollar value but by the consequences of actions (and sometimes inaction) that were taken that gave good reason for the courts to become the official battleground to determine who really is on the right side of the argument.

Humana History

From Louisville, Kentucky, Humana Inc., first began as a nursing home company on August 18, 1961, by David A. Jones and Wendell. The two lawyers actually ran it as Extendicare Inc. and by 1968 became the largest nursing home company in America. In 1972, the men sold it to purchase hospitals. It wasn’t until 1974 that the company’s name officially changed to Humana Inc. The concept behind the name was to make it more appealing to the public eye. The name also suggested the company supported superior care for members of the human race who needed it instead of taking an indifferent approach. As it grew over time, which included a 1978 takeover of American Medicorp Inc., Humana Inc. became the world’s largest hospital company during the 1980s. Shortly after the American health care system changed some of its policies in the 1980s, this steered Humana to develop its own insurance plan after a hospital in the state of Arizona lost a contract with the largest health maintenance organization in its area. As of 1993, Humana became the largest hospital operator in America with seventy-seven hospitals that also witnessed their combined operations in hospitals and health insurance develop the business entity known as Galen Health Care. It was also in 1993 that Humana Military Healthcare Services (HMHS) was developed as its own subsidiary that later began serving military beneficiaries in 1996. From 2004 until 2009, this division served as the care contractor for the Department of Defense Military Health System TRICARE South Region before it was regained in 2011.

In 1997, David A. Jones stepped aside as Humana Inc.’s CEO. A year later, United Healthcare attempted to acquire Humana but that effort failed after United’s stocks plummeted by $2.9 billion USD in value. Come 2001, Humana became a cofounder of Availity. In 2005, it partnered with Virgin Group, offering financial incentives to its members who chose to live a healthier lifestyle that included regular exercise. The Centers for Disease Control and Prevention (CDC) partnered with Humana Inc. on November 16, 2006, to improve upon the private sector healthcare approaches to population health management. It was during that same year Medicare Advantage was launched, as well as Prescription Drug Plans, as education campaigns to inform the consumers eligible for Medicare as dictated in the Medicare Modernization Act. It was also in 2006 that Humana launched the national mail-order pharmacy business, RightSource. Come March 2008, Fortune Magazine credited Humana as one of the five most admired healthcare companies in the United States. Humana’s expansionism continued in 2010 after it acquired Concentra Inc. before selling it in 2015 to Select Medical Holdings Corporation and its partners. It was also in 2015 Aetna Inc. hoped to acquire Humana for $37 billion but the merger was blocked by a federal judge twice in 2017. A year later, Humana acquired Kindred Healthcare with the assistance of two private equity firms that saw a forty percent stake in the health, hospice, and community care business. It was that same year Humana Studio H was created as a digital health and analytics division. A year later, it acquired Enclara Healthcare. Come 2022, Humana sold its Kindred holdings to a private investment company.

10. Humana vs. Centers for Medicare & Medicaid Services ($3,100,900 USD)

When going over the archived information provided by the Centers for Medicare & Medicaid Services, Humana committed the following violation, Medicare Parts C and D Enforcement Action with its improper contract administration. A $3,100,900 USD settlement was reached on December 29, 2015 after it was established this was owed as civil money payments owed to the plaintiffs to compensate for what was financial mismanagement on Humana’s part.

9. Humana Insurance Co. vs. Missouri Department of Insurance ($4.5 Million USD)

On December 6, 2013, the Missouri Department of Insurance agreed to a settlement with Humana Insurance Co. for $4.5 million USD as it was revealed by investigation Humana engaged in a scheme that convinced some of the employers of Missouri and Wisconsin to purchase Humana’s group life insurance product at a price tag that was higher than it should have been.

8. Humana vs. John Smelik ($7.4 Million USD)

On July 1, 2005, a local jury awarded John Smelik and his family $7.4 million USD in the wrongful death lawsuit filed against Humana Health Plan of Texas Inc. and its medical team. After the jurors went over the information provided by both sides of this legal battle that circulated around the neglect Joan Smelik received, they ruled in favor of the plaintiff and his sons when it was discovered Humana failed to provide standard medical care to a patient that was in need of it. There was enough evidence presented that Humana failed to follow even its own publication of guidelines, policies, and procedures in order to provide proper health management care to someone whom they diagnosed as a complex patient. It was revealed Humana knew exactly what Joan Smelik’s medical condition was and how to manage it but failed to their part to properly follow up. When going over the details shared by the Physicians for a National Health Program, it was negligence on Humana’s part that caused the death of a human being who deserved better.

7. Humana Medical Organization vs. Medicaid and Medicare ($8 Million USD)

According to the Florida Attorney General archives, the Humana Medical Organization was ordered to pay eight million dollars after it was revealed it had double-billed Medicaid and Medicare for the same services. It was prohibited by law for recipients to be dually enrolled in separately managed care plans. Public health care laws stated funding for patients eligible for both Medicare and Medicaid should be born by Medicare only. HMO’s double-billing practice, upon discovery in 2001, served as a violation of the False Claims Act, and was ordered to pay the money back on June 28, 2001.

6. Carolyn J. O’Leary v. Humana Insurance Company ($11,206.888 USD)

Filed on December 20, 2017, then settled on September 20, 2021, there were two hundred nurses that demanded Humana compensate them for the overtime money owed to them as healthcare workers. Law 360 revealed Humana was to fork out $11,206.888 USD to the defendants. Under the Fair Labor Standards Act, this lawsuit accused Humana of operating a scheme to deprive the nurses and advisors of overtime compensation by improperly classifying them as exempt under the FLSA.

5. Humana vs. False Claims Act Lawsuit, via Sanford Heisler Sharp, LLP ($12.5 Million USD)

According to the news shared by Globe Newswire and Sanford Heisler Sharp, LLP, a $12.5 million USD settlement was reached against Roche Diagnostics Corp., Roche Diabetes Care, Inc., Humana, Inc., Humana Pharmacy, Inc., and Humana Pharmacy Solutions, Inc. in what was a False Claims Act lawsuit. This was brought on by a whistleblower relator who brought this court case to the attention of the law firm in 2014. It was taken to the U.S. District Court for the Northern District of Illinois which claimed there were violations committed in the Anti-Kickback Statute and the False Claims Act. The false claims submitted to the Medicare Advantage program witnessed several taxpayers defrauded as dubious transactions took place between pharmaceutical companies and Humana’s Medicare Advantage Organization. Both Humana and Roche engaged in a kickback relationship where debt forgiveness was traded in order to gain access to the Medicare business funded by the government, costing the taxpayers in the Illinois region millions. When the whistleblower came forward, that person did so at the great personal risk that ultimately saw to it the taxpayers were paid back by a practice that ultimately served as a breach of public trust.

4. Humana vs. Medicare, via U.S. Attorney-Southern District of Florida ($14.5 Million USD)

Medicare and the U.S. Attorney-Southern District of Florida filed a False Claims Act lawsuit against Humana on June 7, 2000. After investigations revealed the government was overbilled by Humana throughout the 1990s, the thousand-plus patients from the South Florida region stood to be compensated for their monetary loss. These patients were wrongly categorized for Medicare payment purposes, a mistake Humana was accused of doing nothing about even after it was suspected they already knew about it.

3. Humana at Home vs. Daverlynn Kinkead ($17 Million USD)

This class action lawsuit saw Humana pay $17 million USD to the home health care workers who were owed overtime. Via Humana at Home and SeniorBridge Family Companies, the company had employed a collection of workers who had lengthy shifts that also included twenty-four-hour live-in arrangements. When these workers realized they were owed overtime, they collectively filed a lawsuit against the company in 2015. As of March 26, 2017, a joint motion was issued for the Connecticut District Court to accept the settlement agreement as a means to put an end to what would have otherwise been a lengthy and complicated trial process.

2. Humana vs. Biogen ($22 Million USD)

The legal dispute between Biogen and Humana began on September 24, 2021, after Humana challenged Biogen’s excuse of using charities as a means to boost sales of its multiple sclerosis drugs. This practice offered patients sample medication before shuffling them onto Medicare and other government-related insurance programs, using a charity-giving ploy to do it. Biogen illegally paid its patients under the guise of unrestricted charitable giving. Humana suggested Biogen worked with Advance Care Scripts, Chronic Disease Fund, and The Assistance Fund as part of a charitable foundation network to boost Biogen’s sales. From 2011 until 2019, Humana spent over $2.5 billion USD on Biogen’s MS drugs, which cost a patient anywhere between $50,000 to $80,000 USD per year. With the copay system, drug companies like Biogen can earn a hefty profit by using charity kickbacks at the expense of the insurer. While the idea of helping MS drug patients save money from the steep prices seems honorable enough, the business practice Biogen engaged in served as grounds for litigation argument by Humana. Biogen agreed to settle this argument for $22 million USD.

1. Humana vs. Medicare ($200 Million USD)

In Florida, there was a $200 million USD dispute after findings from a federal audit that realized the 2015 claims made by Humana Inc. overstated how sick some of their patients were. According to NPR, the Health and Human Services Office of Inspector General ordered Humana to send the overcharged payments back to the federal government, which met with an argument issued by the company. Humana’s Medicare Advantage has been an insurance program favored by the senior community for years and has often found itself on the receiving end of multiple investigations carried out by the government. In this investigation, the Department of Justice, along with Medicare audits and lawsuit whistleblowers, did learn some of the plans were overpaid by the government due to Humana’s overly-inflated pricing system. In 2020, it was estimated over $16 billion USD was met with questionable reasoning as it was revealed the medical conditions of many seniors involved were greatly exaggerated. Not helping the matter is the amount of opposition the government is facing in order to learn more about potential overpayments as they attempt to audit Humana and its Medicare Advantage program. This audit went from February 2017 until August 2020 that involved approximately two hundred patients. When there was a lack of evidence to justify Humana’s reasoning behind the various medical diagnosis results, the company was ordered to pay back the 2015 overpayments.

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