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Humana says government shutdown delays military health payments

(Reuters) - Humana Inc, the managed care company, said on Tuesday the U.S. government shutdown would delay payments related to its military health services contract and that it could be liable for up to $175 million worth of claims if the payments do not come through.

Humana provides administrative services to the government for healthcare, with the federal government covering the cost of the benefits and associated risk.

In a regulatory filing, Humana said it was notified by the government on October 2 it had permission to continue administering the contract for two weeks, but would not receive payments because the Defense Health Agency did not have legal authority to make them.

The agency said once funding authority is received, payments will be accelerated and paid with interest, according to Humana.

The company said it could be liable for the claims during the period if the agency does not reimburse it once the shutdown has ended. It also said it does not believe that will have a material impact on its financial position.

Humana shares were off 4 cents at $94.67 in morning trading.

(Reporting by Caroline Humer; Editing by Jeffrey Benkoe)

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