Humana 2011 Annual Report Download - page 128

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
our factual findings as well as any remedial actions we have taken or may take. We also may face litigation or
further government inquiry regarding certain aspects of the Medicare and Medicaid operations of certain of our
Florida subsidiaries.
On December 16, 2010, an individual filed a qui tam suit captioned United States of America ex rel. Marc
Osheroff v. Humana et al. in the Southern District of Florida, against us, several of our health plan subsidiaries,
and certain other companies that operate medical centers in Miami-Dade County, Florida. After the U.S.
government declined to intervene, the Court ordered the complaint unsealed, and the individual plaintiff amended
his complaint and served the Company on December 8, 2011. The Amended Complaint alleges certain civil
violations by our CAC Medical Centers in Florida, including offering various amenities such as transportation
and meals, to Medicare and dual eligible individuals in our community center settings. The Amended Complaint
seeks damages and penalties on behalf of the United States under the Anti-Inducement and Anti-Kickback
Statutes and the False Claims Act. We expect to file motions to dismiss on behalf of Humana and our
subsidiaries.
On January 6, 2012, the Civil Division of the United States Attorney’s Office for the Southern District of
Florida advised our legal counsel that it is seeking documents and information from us and several of our
affiliates relating to several matters including the coding of medical claims by one or more South Florida medical
providers, and loans to physician practices.
Other Lawsuits and Regulatory Matters
Our current and past business practices are subject to review or other investigations by various state
insurance and health care regulatory authorities and other state and federal regulatory authorities. These
authorities regularly scrutinize the business practices of health insurance and benefits companies. These reviews
focus on numerous facets of our business, including claims payment practices, provider contracting, competitive
practices, commission payments, privacy issues, utilization management practices, and sales practices, among
others. Some of these reviews have historically resulted in fines imposed on us and some have required changes
to some of our practices. We continue to be subject to these reviews, which could result in additional fines or
other sanctions being imposed on us or additional changes in some of our practices.
We also are involved in various other lawsuits that arise, for the most part, in the ordinary course of our
business operations, certain of which may be styled as class-action lawsuits, including employment litigation,
claims of medical malpractice, bad faith, nonacceptance or termination of providers, anticompetitive practices,
improper rate setting, failure to disclose network discounts and various other provider arrangements, general
contractual matters, intellectual property matters, and challenges to subrogation practices. As a government
contractor, we may also be subject to qui tam litigation brought by individuals who seek to sue on behalf of the
government, alleging that the government contractor submitted false claims to the government. Litigation of this
nature is filed under seal to allow the government an opportunity to investigate and to decide if it wishes to
intervene and assume control of the litigation. If the government does not intervene, the lawsuit is unsealed, and
the individual may continue to prosecute the action on his or her own. We also are subject to claims relating to
performance of contractual obligations to providers, members, and others, including failure to properly pay
claims, improper policy terminations, challenges to our implementation of the Medicare Part D prescription drug
program and other litigation. Under state guaranty assessment laws, we may be assessed (up to prescribed limits)
for certain obligations to the policyholders and claimants of insolvent insurance companies that write the same
line or lines of business as we do.
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
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