Humana Faces Fraud and Abuse Reckoning: A Timeline of Legal Actions, Settlements, and Whistleblower Cases

Medicare Advantage Giant Under Fire

A chronologically ordered investigation into Humana’s fraud, waste, and abuse cases since 2022—detailing federal enforcement, whistleblower suits, allegations of Medicare bid fraud, illegal kickbacks, risk score manipulation, and their fallout on finances and patient care.

Introduction

Humana Inc., one of the nation’s largest health insurers and Medicare Advantage organizations, has come under intense legal scrutiny from 2022 through 2025 over numerous fraud, waste, and abuse (FWA) allegations. Federal agencies, state regulators, and whistleblowers have brought forward substantiated claims ranging from Medicare Part D bid fraud to illegal kickback schemes in Medicare Advantage plan marketing. This investigative report provides a detailed timeline of these legal actions and analyzes how each incident unfolded, the charges involved, and their impact on Humana’s finances and operations. Drawing on primary sources—Department of Justice complaints, Office of Inspector General audits, Centers for Medicare & Medicaid Services enforcement notices, and court filings—we examine the nature of the fraud, how oversight gaps allowed it, and what these cases mean for the wider payer industry. The findings reveal a pattern of compliance vulnerabilities within Humana’s business model and underscore emerging red flags that compliance executives should heed. Sources: www.justice.gov,www.oig.hhs.gov,www.cms.gov

Timeline of Legal Actions (Chronological)

September 2025 — Court Orders Humana to Pay Whistleblower Legal Fees

A federal court ordered Humana to pay $32.2 million in attorney fees and costs related to the Part D bid fraud case. The court rejected Humana’s challenge to the fee amount, citing the case’s complexity and duration. Sources:www.beckerspayer.com,www.reuters.com

May 2025 — DOJ Files FCA Complaint Alleging Kickbacks and Disability Discrimination

The DOJ intervened in a qui tam action alleging Humana paid illegal kickbacks to insurance brokers to steer Medicare beneficiaries into its Medicare Advantage plans. The complaint further alleges discrimination against disabled beneficiaries by discouraging their enrollment to reduce plan costs. The case remains in active litigation with no liability determination as of 2025. Sources: www.justice.gov

September 2024 — OIG Audit Finds Medicare Advantage Overpayments

The HHS Office of Inspector General released an audit finding that Humana submitted unsupported diagnosis codes in Medicare Advantage risk adjustment data, resulting in an estimated $13.1 million in overpayments. OIG formally recommended $6.8 million in refunds due to regulatory limits on extrapolation. Humana disputed the findings and declined repayment. CMS had not recovered funds as of 2025.
Sources: www.oig.hhs.gov

August 2024 - $90 Million Whistleblower Settlement Over Medicare Part D Bid Fraud

Humana agreed to pay $90 million to resolve a False Claims Act lawsuit alleging it submitted fraudulent Medicare Part D bids over several years. The whistleblower, a former Humana actuary, alleged the company misrepresented expected drug cost coverage levels while internally projecting significantly lower liability, shifting excess costs onto Medicare and beneficiaries. The DOJ declined intervention, but Humana settled without admitting wrongdoing. The settlement addressed allegations that hundreds of millions in overpayments resulted from manipulated bid assumptions. Sources: www.beckerspayer.com,www.healthcarefinancenews.com

April 2023 — Illinois Sanctions Humana for Late Payment in Duals Program

The Illinois Department of Healthcare and Family Services sanctioned Humana $5,000 for failing to meet a required Medicaid–Medicare Alignment Initiative payment deadline. Humana missed its December 2022 remittance and did not request an extension, prompting state enforcement. While financially minor, the sanction reflects state-level contract enforcement tied to compliance performance. Sources: www.hfs.illinois.gov

November 2022 — CMS Penalizes Humana for Overcharging Enrollees

Following a 2019 financial audit, CMS imposed a civil money penalty of $131,660 on Humana for multiple compliance failures. Auditors found Humana had not properly transferred Medicare Part D drug cost accumulators when members switched plans, failed to make timely retroactive claims adjustments, and charged incorrect cost-sharing under Medicare Advantage—causing beneficiaries to overpay for prescriptions and medical services. CMS noted instances in which Humana’s errors led to patients being overcharged and not refunded within the required timeframes. This penalty signaled regulatory concerns that Humana failed to meet its responsibility to administer benefits in accordance with Medicare rules. The penalty was paid, and corrective actions were required. Sources: www.cms.gov

Breakdown on Humana's Continued Issues

Humana’s enforcement history reveals three dominant fraud vectors: Medicare Part D bid misrepresentation, Medicare Advantage marketing kickbacks, and inflated risk adjustment submissions. These schemes exploited complex payment systems, allowing revenue optimization that crossed legal boundaries and shifted costs onto Medicare and beneficiaries. Sources: www.beckerspayer.com, www.healthcarefinancenews.com, www.justice.gov, www.oig.hhs.gov, www.cms.gov

Background on Humana’s Programs and Business Model

Humana’s business is heavily concentrated in Medicare Advantage and Part D, with dominant market share across many U.S. counties. Its revenue model relies on capitation, risk adjustment, competitive bidding, and broker-driven enrollment—each of which appears in enforcement actions examined in this report. Sources: www.kff.org, www.beckerspayer.com

How the Fraud Occurred

The Part D bid scheme relied on dual actuarial assumptions, while the MA kickback scheme used marketing fees tied to enrollment volume. Risk adjustment overpayments stemmed from insufficient validation of provider-submitted diagnoses. In each case, complexity, limited audits, and delayed enforcement allowed the conduct to persist. Sources: www.healthcarefinancenews.com, www.phillipsandcohen.com, www.whistleblowerllc.com, www.oig.hhs.gov

Oversight Vulnerabilities

Oversight gaps included reliance on self-certification, delayed audits, fragmented agency coordination, and regulatory complexity that shielded misconduct. Humana’s successful litigation against CMS audit expansion further illustrates structural enforcement limits. Sources: www.oig.hhs.gov, www.fiercehealthcare.com, www.reuters.com

Financial and Regulatory Impact

Humana’s confirmed payments exceed $125 million, excluding pending exposure from ongoing litigation. Beyond fines, these cases triggered operational changes, heightened regulatory scrutiny, and reputational damage affecting patient trust and market confidence. Sources: www.beckerspayer.com, www.cms.gov, www.oig.hhs.gov, www.justice.gov

Final Thoughts — From Awareness to Action

Humana’s 2022–2025 enforcement timeline illustrates how FWA risk can accumulate quietly within complex systems until exposed through audits or whistleblowers. The lesson for payers is clear: proactive detection and cultural accountability are essential to protecting public funds, patient trust, and long-term organizational viability. Sources: www.justice.gov, www.oig.hhs.gov, www.cms.gov