Humana Inc., the second-biggest private provider of Medicare coverage, is no longer employing a law firm whose actions are being reviewed by a U.S. senator in connection with his probe into whether government information was leaked this month that sent the company’s stock soaring.
The insurer cut its connections with Greenberg Traurig LLP after learning of the review, according to Tom Noland, a spokesman for Louisville, Kentucky-based Humana. The insurance carrier also has begun an internal investigation, Noland said yesterday in a telephone interview.
U.S. Senator Charles Grassley, an Iowa Republican, is reviewing whether an investor company, Height Analytics LLC, received inside information from a Greenberg Traurig employee before telling clients the afternoon of April 1 that officials would change plans and reduce a proposed rate cut for Medicare Advantage plans sold by private insurers.
Grassley has also requested information from New York-based Greenberg Traurig about an e-mail one of its lobbyists, Mark Hayes, sent to a Height analyst on April 1 saying Medicare would change its decision.
Jill Perry, a spokeswoman for Greenberg Traurig, didn’t immediately respond today to telephone calls or e-mails seeking comment. On April 17, Perry said the law firm didn’t receive or share any “material non-public” information. Hayes also didn’t immediately return telephone messages or e-mails today seeking comment.
Shares of Humana and other insurers jumped in the last 20 minutes of the trading day after Height sent an e-mail to clients predicting the rate cut would be reduced. Medicare officially announced the decision about 45 minutes later.
Humana fell 3.1 percent to $72.21 in New York trading yesterday. The shares have declined 20 percent in the past 12 months.
Noland said Humana had no advance notice of Medicare’s decision. The internal probe is meant to determine if Greenberg Traurig “in any way hurt Humana’s interests,” he said. It was unclear how long the investigation may take or if its results would be shared with Grassley, he said.
The Centers for Medicare and Medicaid Services, which oversees the insurance program, also said it’s reviewing the situation.
Height did nothing wrong, its managing partner, Andrew Parmentier, said in a statement on April 17 to the firm’s clients. Its report was based on “careful and close analysis” and not inside information, he said.
Humana’s actions were first reported earlier by the Wall Street Journal.
© Copyright 2013 Bloomberg News. All rights reserved.