Humana Backs Reforms To Limit Medicare Advantage Billing Practices

Humana Inc. HUM signaled support for reforms that would curb industry billing practices that have led to billions in additional payments.

What Happened: Last fall, Senators Mike Crapo and Ron Wyden asked insurers for ideas to address home-visit-related payment practices.

Human, one of the largest Medicare Advantage insurers in the U.S., recently shared its stance. In a one-page policy overview viewed by The Wall Street Journal, the company favored limiting insurers’ use of home visit diagnoses to obtain higher payments.

These home visits, often conducted by nurse practitioners and not directly linked to treatment, have become increasingly scrutinized for their role in boosting payments by identifying sometimes questionable or unverified medical conditions.

Also Read: UnitedHealth Board Reelects Directors, Hikes Dividend As CEO Pledges Review Of Medicare Practices

Why It Matters: Humana’s position is a notable shift in the ongoing debate over payments tied to diagnosis coding in the $460 billion Medicare Advantage program.

A Wall Street Journal investigation revealed that such home-based assessments generated $15 billion in additional revenue for Medicare Advantage insurers between 2019 and 2021.

UnitedHealth Group UNH accounted for roughly two-thirds of those payments, with an average gain of $2,735 per home visit. Humana’s average was $1,525.

UnitedHealth’s HouseCalls program conducted around 2.9 million home visits last year, while CVS Health Inc CVS, through Signify Health, also operates a similar model.

Insurers argue that many of these home visits help detect undiagnosed conditions. However, reports indicate that diagnoses are frequently recorded by nurses who aren’t treating the conditions and may rely on broad training to spot potential health issues.

These diagnoses often don’t align with those documented by the patients’ primary care physicians.

Humana has proposed that insurers should only receive extra payments for diagnoses made during home visits if those conditions are documented during other types of medical encounters, such as health-risk assessments outside the home or standard clinic visits.

The company also recommends limiting another controversial practice: diagnosis coding from medical chart reviews unrelated to specific patient visits. Humana’s policy update comes after an internal review launched by CEO Jim Rechtin, who took the helm in July 2023.

Meanwhile, Medicare’s top official, Mehmet Oz, has committed to tightening oversight of the Advantage program.

Legal Issues: In May, the U.S. Department of Justice filed a lawsuit against Elevance Health, Inc. ELV, Humana, and Aetna, Inc. 

The lawsuit alleges that from 2016 through at least 2021, the insurers paid hundreds of millions of dollars in illegal kickbacks to brokers in exchange for enrolling Medicare beneficiaries into their Medicare Advantage plans.

And in February, the Justice Department launched a civil fraud investigation into UnitedHealth’s Medicare billing practices.

The probe examines UnitedHealth's Medicare Advantage plans and physician groups following reports that the company received billions in federal payments for questionable diagnoses.

Price Action: HUM stock is up 0.29% at $231.88 at the last check on Thursday.

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