News: Humana overcharged Medicare by nearly $200 million, OIG audit finds

A Humana health plan in Florida overcharged Medicare by nearly $200 million in 2015 by incorrectly billing for high severity hierarchical condition categories (HCC) that were not supported, according to a recent audit from the Office of Inspector General (OIG).

To conduct the audit, the OIG reviewed a sample of 200 enrollees with at least one diagnosis code that mapped to an HCC for 2015. Humana provided medical records as support for 1,525 HCCs associated with the reviewed enrollees, which were then reviewed by an independent medical contractor.

According to the OIG, Humana did not submit some diagnosis codes to CMS for use in the risk adjustment program in accordance with the Federal requirements. The audit found that:

1. Most of the codes Humana submitted were supported in the medical records and validated 1,322 of the sampled enrollees’ HCCs, but the remaining 203 HCCs were not validated and resulted in overpayments. These unvalidated HCCs included 20 for which the OIG identified 22 other replacement HCCs for more and less severe manifestations of the diseases.
2. There were 15 HCCs for which the medical record supported diagnosis codes that Humana should have submitted to CMS but did not.

As a result of these findings, the OIG says that the risk scores for the 200 sampled enrollees should have been based on 1,359 HCCs (1,322 validated HCCs, plus 22 other HCCs, plus 15 additional HCCs). This resulted in Humana receiving at least $197.7 million in overpayments in 2015.

According to the OIG, these errors “occurred because Humana’s policies and procedures to prevent, detect, and correct noncompliance with CMS’s program requirements, as mandated by Federal regulations, were not always effective.”

The OIG recommended that Humana repay the overpayments and enhance it prevention, detection, and correction policies and procedures. Humana disagreed with both the findings and recommendations. Additionally, Humana submitted additional medical record documentation, and took issue with the OIG’s audit and methodologies.

In response, the OIG adjusted their final report to recommend that Humana repay $197.7 million, instead of the $263.1 million initially proposed in the draft report. The OIG did not alter their second recommendation.

Editor’s note: To read the full OIG report, click here. To read about other OIG audit activity, click here.