After a two-year probe by two Florida agencies checking into complaints about overcharging on hospital bills, Humana has agreed to pay $6.3 million in refunds and investigative costs.
The company, however, insists it never overcharged anyone.
Some 37,000 Floridians will be getting checks ranging from $10 to $7,412.90 within the next couple of months under the terms of the settlement announced last week.
From 1984 through 1991, Humana Health Insurance Co. of Florida overbilled policyholders for stays in hospitals owned by the insurer's parent, according to state Attorney General Bob Butterworth and Insurance Commissioner Tom Gallagher.
Patient co-insurance charges for people covered by Humana Health were based on the full amounts of hospital bills-even though the insurance company was given discounts of as much as 89% by the hospitals, the joint investigation conducted by Messrs. Butterworth and Gallagher concluded.
Humana has agreed to pay refunds within 45 days to customers who were overbilled in an amount equal to the overcharge plus 50%.
Nearly $4.4 million will go to refunds and nearly $1.9 million for investigative costs.
"This matter has tied up valuable resources, and the costs associated with contesting the allegations have continued to rise," Humana spokesman Greg Donaldson said from company headquarters in Louisville, Ky. "Eventually those costs could have been passed on to consumers."
Humana spun off its hospitals in 1993, and they were then sold to Columbia/HCA Healthcare Corp.
"This is a hospital issue," Mr. Donaldson said. "We wanted to get it behind us." He added that 60% of the settlement costs will be picked up by Columbia/HCA.
"Although it's a Humana issue, when the companies split we had a contractual obligation because of the split," said Columbia/HCA Senior Vice President Lindy Richardson.