Humana 2004 Annual Report Download - page 30
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and others, including failure to properly pay claims and challenges to the use of certain software products in
processing claims. Pending state and federal legislative activity may increase our exposure for any of these types
of claims.
In addition, some courts have issued rulings which make it easier to hold plans liable for medical negligence
on the part of network providers on the theory that providers are agents of the plans and that the plans are
therefore vicariously liable for the injuries to members by providers.
Personal injury claims and claims for extracontractual damages arising from medical benefit denials are
covered by insurance from our wholly owned captive insurance subsidiary and excess carriers, except to the
extent that claimants seek punitive damages, which may not be covered by insurance in certain states in which
insurance coverage for punitive damages is not permitted. In addition, insurance coverage for all or certain forms
of liability has become increasingly costly and may become unavailable or prohibitively expensive in the future.
The likelihood or outcome of current or future suits, like the purported class action lawsuit described above,
or governmental investigations, cannot be accurately predicted with certainty. In addition, the potential for
increased liability for medical negligence arising from claims adjudication, along with the increased litigation
that has accompanied the negative publicity and public perception of our industry, adds to this uncertainty.
Therefore, such legal actions and government audits and investigations could have a material adverse effect on
our financial position, results of operations, and cash flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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