Humana 2013 Annual Report Download - page 40

American Recovery and Reinvestment Act of 2009 (ARRA)
On February 17, 2009, the American Recovery and Reinvestment Act of 2009, or ARRA, was enacted into
law. In addition to including a temporary subsidy for health care continuation coverage issued pursuant to the
Consolidated Omnibus Budget Reconciliation Act, or COBRA, ARRA also expands and strengthens the privacy
and security provisions of HIPAA and imposes additional limits on the use and disclosure of protected health
information, or PHI. Among other things, ARRA requires us and other covered entities to report any
unauthorized release or use of or access to PHI to any impacted individuals and to the U.S. Department of Health
and Human Services in those instances where the unauthorized activity poses a significant risk of financial,
reputational or other harm to the individuals, and to notify the media in any states where 500 or more people are
impacted by any unauthorized release or use of or access to PHI. ARRA also requires business associates to
comply with certain HIPAA provisions. ARRA also establishes higher civil and criminal penalties for covered
entities and business associates who fail to comply with HIPAA’s provisions and requires the U.S. Department of
Health and Human Services to issue regulations implementing its privacy and security enhancements.
Workers’ Compensation Laws and Regulations
In performing services for the workers’ compensation industry through our subsidiary Concentra, we must
comply with applicable state workers’ compensation laws. Workers’ compensation laws generally require
employers to assume financial responsibility for medical costs, lost wages, and related legal costs of work-related
illnesses and injuries. These laws generally establish the rights of workers to receive benefits and to appeal
benefit denials, prohibit charging medical co-payments or deductibles to employees, may restrict employers’
rights to select healthcare providers or direct an injured employee to a specific provider to receive non-
emergency workers’ compensation medical care, and may include special requirements for physicians providing
non-emergency care for workers’ compensation patients, including requiring registration with the state agency
governing workers’ compensation, as well as special continuing education and training, licensing and other
regulatory requirements. To the extent that we are governed by these regulations, we may be subject to additional
licensing requirements, financial oversight, and procedural standards for beneficiaries and providers.
Corporate Practice of Medicine and Other Laws
As a corporate entity, Humana Inc. is not licensed to practice medicine. Many states in which we operate
through our subsidiaries limit the practice of medicine to licensed individuals or professional organizations
comprised of licensed individuals, and business corporations generally may not exercise control over the medical
decisions of physicians. Statutes and regulations relating to the practice of medicine, fee-splitting between
physicians and referral sources, and similar issues vary widely from state to state. Under management
agreements between certain of our subsidiaries and affiliated physician-owned professional groups, these groups
retain sole responsibility for all medical decisions, as well as for hiring and managing physicians and other
licensed healthcare providers, developing operating policies and procedures, implementing professional
standards and controls, and maintaining malpractice insurance. We believe that our health services operations
comply with applicable state statutes regarding corporate practice of medicine, fee-splitting, and similar issues.
However, any enforcement actions by governmental officials alleging non-compliance with these statutes, which
could subject us to penalties or restructuring or reorganization of our business, may result in a material adverse
effect on our results of operations, financial position, or cash flows.
Anti-Kickback, Physician Self-Referral, and Other Fraud and Abuse Laws
A federal law commonly referred to as the “Anti-Kickback Statute” prohibits the offer, payment,
solicitation, or receipt of any form of remuneration to induce, or in return for, the referral of Medicare or other
governmental health program patients or patient care opportunities, or in return for the purchase, lease, or order
of items or services that are covered by Medicare or other federal governmental health programs. Because the
prohibitions contained in the Anti-Kickback Statute apply to the furnishing of items or services for which
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