The Florida Agency for Health Care Administration (“AHCA”) in August 2011 fined Humana $3.4 million for failing to promptly report suspected cases of Medicaid fraud and abuse by others, as required by statute and Humana’s Medicaid HMO contract.
Though many states have similar laws or regulations, this appears to be the first enforcement action of its kind in the nation. These laws and regulations impose substantial requirements on managed care companies to engage in anti-fraud investigative activities of their providers and promptly report the results of those investigations to the appropriate state agencies. Given the current budgetary constraints throughout the country, many states could begin to enforce these investigation and reporting requirements more stringently.
The Florida Action
Under Florida law, managed care organizations (“MCOs”) that participate in the state Medicaid program have substantial statutory and contractual obligations to conduct robust and comprehensive investigative activities designed to detect and prevent overpayments, abuse and fraud. Additionally, MCOs must report all suspected or confirmed instances of provider or recipient fraud and abuse within 15 calendar days after detection to the Florida Office of Medicaid Program Integrity. Failure to report will result in a fine of $1,000 per day. In the situation with Humana, AHCA alleged that it failed to report suspected cases of provider fraud within the 15-day reporting period, stemming as far back as August 2009. For these statutory violations, AHCA imposed a $2.7 million fine
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