Humana 2015 Annual Report Download - page 133

Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
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Our state-based Medicaid business accounted for approximately 4% of our total premiums and services revenue
for the year ended December 31, 2015. In addition to our state-based Temporary Assistance for Needy Families, or
TANF, Medicaid contracts in Florida and Kentucky, we have contracts in Illinois and Virginia for stand-alone dual
eligible demonstration programs serving individuals dually eligible for both the federal Medicare program and the
applicable state-based Medicaid program as well as an Integrated Care Program, or ICP, Medicaid contract in Illinois.
We began serving members in Illinois in the first quarter of 2014 and in Virginia in the second quarter of 2014. In
addition, we began serving members in Long-Term Support Services (LTSS) regions in Florida at various effective
dates ranging from the second half of 2013 through the first quarter of 2014.
The loss of any of the contracts above or significant changes in these programs as a result of legislative or regulatory
action, including reductions in premium payments to us, regulatory restrictions on profitability, including by comparison
of our Medicare Advantage profitability to our non-Medicare Advantage business profitability and a requirement that
they remain within certain ranges of each other, or increases in member benefits without corresponding increases in
premium payments to us, may have a material adverse effect on our results of operations, financial position, and cash
flows.
Legal Proceedings and Certain Regulatory Matters
Florida Matters
On January 6, 2012, the Civil Division of the United States Attorney’s Office for the Southern District of Florida
advised us 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.
On May 1, 2014, the U.S. Attorney's Office filed a Notice of Non-Intervention in connection with a civil qui tam suit
related to one of these matters captioned United States of America ex rel. Olivia Graves v. Plaza Medical Centers, et
al., and the Court ordered the complaint unsealed. Subsequently, the individual plaintiff amended the complaint and
served the Company, opting to continue to pursue the action. The individual plaintiff has filed a third amended complaint
which we answered on October 16, 2015. The Court has ordered trial to commence on October 3, 2016 if the matter
is not resolved prior to trial. We continue to cooperate with and respond to information requests from the U.S. Attorney’s
office. These matters could result in additional qui tam litigation.
As previously disclosed, the Civil Division of the United States Department of Justice had provided us with an
information request, separate from but related to the Plaza Medical matter, concerning our Medicare Part C risk
adjustment practices. The request relates to our oversight and submission of risk adjustment data generated by providers
in our Medicare Advantage network, including the providers identified in the Plaza Medical matter, as well as to our
business and compliance practices related to risk adjustment data generated by our providers and by us, including
medical record reviews conducted as part of our data and payment accuracy compliance efforts, the use of health and
well-being assessments, and our fraud detection efforts. We believe that this request for information is in connection
with a wider review of Medicare Risk Adjustment generally that includes a number of Medicare Advantage plans,
providers and vendors. We continue to cooperate with and voluntarily respond to the information requests from the
Department of Justice and the U.S. Attorney’s Office. These matters are expected to result in additional qui tam
litigation.
On June 16, 2015, the U.S. Attorney’s Office filed a Declination Notice, indicating its intent not to intervene, in
connection with a civil qui tam suit captioned U.S. ex rel. Ramsey-Ledesma v. Censeo, et al., and the Court ordered the
complaint unsealed. Subsequently, the individual plaintiff filed a second amended complaint and served the Company,
opting to continue to pursue the action. The plaintiff’s second amended complaint names several other defendants,
including CenseoHealth. On January 8, 2016, we and the other defendants each filed a motion to dismiss the second
amended complaint.
Litigation Related to the Merger
In connection with the Merger, three putative class action complaints were filed by purported Humana stockholders
challenging the Merger, two in the Circuit Court of Jefferson County, Kentucky and one in the Court of Chancery of
the State of Delaware. The complaints are captioned Solak v. Broussard et al., Civ. Act. No. 15CI03374 (Kentucky