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Department of Health and Human Services

Office of Inspector General -- AUDIT

"Review of Humana’s $21.7 Million Underpayment Claim for Beneficiaries Classified as Residing Outside the Plan’s Service Area," (A-06-99-00060)

June 22, 2001


Complete Text of Report is available in PDF format (2.62 MB). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.

EXECUTIVE SUMMARY:

Humana, Inc., a national managed care organization chain, submitted a claim to the Centers for Medicare and Medicaid Services (CMS) asserting that CMS, in many cases, had based payments for enrolled Medicare beneficiaries on incorrect State and county address codes resulting in a net underpayment to Humana of $21.7 million for the period October 1991 through December 1997.Our review, at CMS’ request, showed the claim should be reduced to about $9.5 million. The $12.2 million overstatement was due to; duplicate items in the claim and for beneficiaries not enrolled in a Humana plan ($1.3 million), amounts not supported by Humana’s records ($10.2 million), and items that were not, but should have been, included in Humana’s claim ($0.7 million). In our final report we recommended, in addition to a reduction of $12.2 million in Humana’s claim, that CMS establish stringent guidelines for accepting additional documentation from Humana for claims that should be fully developed and supportable before submission to CMS. The CMS concurred with our recommendation.