HUMANA INC (HUM) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that HUMANA INC surfaced in its latest filing.

• Medicare Advantage plans rated 4-star or higher significantly declined in 2025, negatively impacting 2026 quality bonus payments from CMS.2025
• Humana filed a lawsuit seeking to set aside and vacate the 2025 Star Ratings of its Medicare Advantage plans.2025
• Change Healthcare experienced a significant cybersecurity incident disrupting services, impacting payers, providers, and pharmacies including Humana.February 2024
• Approximately 93% of total premiums and services revenue for FY2025 from Medicare, military services, and Medicaid programs.FY2025
• CMS contracts covering ~1.0 million individual Medicare Advantage members in Florida at Dec 31, 2025, accounting for ~14% of FY2025 premiums and services revenue.December 31, 2025
• CMS RADV audits with Final RADV Rule eliminating the FFS Adjuster, intending extrapolated recoveries starting with PY2018.
• Humana Inc. and Humana Benefit Plan of Texas, Inc. filed suit against HHS and Secretary Xavier Becerra on Sep 1, 2023 in U.S. District Court, Northern District of Texas, Fort Worth Division.September 1, 2023
• On September 25, 2025, the district court vacated the Final RADV Rule as procedurally invalid under the APA; government appealed to Fifth Circuit (Humana v Kennedy) on November 21, 2025.2025
• CMS announced RADV audits for all eligible MA contracts for each payment year and expedited completion for PY2018-PY2024 by early 2026.May 21, 2025
• Humana’s actuarially certified bids through PY2026 preserved the position that CMS should apply an FFS Adjuster in any extrapolated RADV audit.PY2026
• Humana launched a Self-Audits program in 2013 applying CMS’s 2012 RADV audit methodology with an estimated FFS Adjuster, completing Self-Audits for PYs2011-2016.2013