Humana faces anti-kickback, False Claims Act suit over diabetes testing equipment

Posted June 12th, 2018.

As It Appeared On
Louisville Business First

Humana Inc. will have to face a lawsuit that alleges that it and a division of Hoffman-La Roche Ltd. violated two federal laws.

By Chris Larson – Reporter, Louisville Business First

Humana Inc. will face an anti-kickback and False Claim Act lawsuit involving a deal it made with a division of international pharmaceutical giant Hoffman-La Roche Ltd.

The U.S. District Court for the Northern District of Illinois tossed motions by Louisville-based Humana (NYSE: HUM) and Indianapolis-based Roche Diagnostics Corp. to dismiss a whistleblower case brought against the companies. The suit was brought by a now former Roche Diagnostics employee who, in part, alleges that Roche inappropriately dismissed debt Humana owed to Roche to keep Roche Diagnostic’s diabetes testing products on Humana’s formularies and to exclude competing products, according to copy of the court’s decision.

The civil complaint, which was filed in June 2014, alleges that this gave Roche inappropriate access to Humana’s insurance plan participants.

The case now will continue to move forward through the legal process. The original complaint requests a jury trial.

A representative from Roche Diagnostics declined to comment on the pending litigation. Humana has not responded to a request for comment, but has told me that the company has a policy not to comment on pending litigation.

The complaint states that Humana planned to cut Roche’s products from its Medicare Advantage plans’ and Medicare prescription drug plans’ formularies in March 2013. But the former employee, who was an account manager in the diabetes division of Roche Diagnostics, discovered that Roche had overpaid Humana in rebates.

A few months later, Roche determined that the company overpaid Humana $45 million in rebates. The complaint alleges that Roche “recognized an opportunity to be placed back on Humana’s formularies.”

The judge’s ruling states that Roche offered to settle the debt for $27.6 million because it didn’t want to jeopardize its relationship with Humana. Humana officials allegedly balked and said they would pay back no more than $20 million, the ruling states.

Negotiations continued until December 2013, according to the judge’s ruling, when Humana and Roche signed a contract that called for Humana to pay Roche no more than $11 million to cover its overpayment debt and to place Roche’s diabetes products back on Humana’s formularies and to exclude competing brands.

The former employee allegedly expressed concerns to her superiors about the deal’s potential violation of two federal laws, the Anti-Kickback Statute and the False Claims Act, according to the judge’s ruling. The former employee was fired shortly after the December deal was executed. The former employee believes she was fired because of “her effort to blow the whistle on [Humana’s and Roche’s] unlawful kickback scheme,” the ruling states.

The complaint also included claims that Roche and Humana inappropriately retaliated against the former employee. The judge’s ruling tossed out the claim against Humana because the employee was not employed by Humana but allowed the retaliation complaints against Roche to continue.

Access to Humana’s Medicare Advantage and prescription plan formularies offers significant access to potential patients. Humana has 8.6 million members in its Medicare Advantage plans and standalone prescription drug plans, according to the company’s most recent quarterly earnings report.

In 2017, Humana had the second largest Medicare Advantage enrollment in the nation, according to a report by the nonprofit Kaiser Family Foundation, a nonprofit health policy group.

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