Medicine & Health

Feds: UnitedHealthcare scored $3.7B in questionable Medicare Advantage pay

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UnitedHealth Group generated $3.7 billion in Medicare Advantage payments in 2016 by listing patient conditions unverified through outside medical claims, according to a Wednesday report by federal investigators.

The announcement stems from a September report by the Office of Inspector General, which now indicates the Minnetonka, Minnesota-based health giant captured a significant number of member diagnoses through chart reviews and health risk assessment services, tactics that “may be particularly vulnerable to misuse by Medicare Advantage companies,” since they are often performed by the health plan or conducted by vendors hired by the health plan, OIG said. The Star Tribune first reported the finding.

UnitedHealthcare, the nation’s largest insurer and the most profitable Medicare Advantage payer, did not respond to an interview request. But the report indicates that 40% of the company’s claims come from care patients may not have needed or received. UnitedHealthcare also accounted for half of all payments the federal government paid for HRAs in 2016, nearly all of which were only reported through in-home vendor visits.

Under the Medicare Advantage program, insurers are paid according to how sick their members are, which can incentivize payers to inflate patients’ risk scores. Two previous OIG reports found that insurers misrepresented patient diagnoses in 2016 to receive “billions” in extra reimbursement from the Centers for Medicare and Medicaid Services.

OIG has called for CMS to provide more oversight of risk adjustment payments, and periodically monitor companies that drive fees from diagnoses unverified through outside claims, like UnitedHealthcare. CMS has said it will take investigators’ recommendations under consideration. The agency has also vowed to take a closer look at the incentives that drive Medicare Advantage and other full-risk models.

During UnitedHealth Group’s most recent third-quarter earnings call, president and chief operating officer Dirk McMahon said it waas important to Preserve the stability of the risk adjustment program.

“The model has been critical for providing broad and equitable access to MA,” McMahon said during the call. “Risk adjustment levels the playing field and ensures that there’s no disincentive to care for the most vulnerable. So we really feel that it’s an essential part of encouraging the right incentives in the program, and think that it’s something to build on.”

The announcement comes as questions over why Medicare Advantage plans cost the government more than fee-for-service Medicare increase, particularly as enrollment in the privatized health program grows and research shows that patient outcomes across both plans remain the same. By 2025, half of all eligible beneficiaries are expected to be enrolled in Medicare Advantage.

Over the past 12 years, the Medicare Payment Advisory Commission has documented $140 billion in Medicare Advantage overpayments, and believes the risk adjustment gaming is increasing.

One way that Medicare Advantage plans can inflate risk scores is by purchasing providers, transitioning them to value-based care arrangements, outfitting them with the company’s technology for identifying any and all potential patient conditions, and pocketing the profits from unnecessary screenings performed and diagnoses listed, according to a recent Health Affairs article co-authored by former acting CMS Administrator Don Berwick and former Trinity Health CEO Richard Gilfillan. The article noted that UnitedHealth Group could be engaged in this practice.

Through its Optum subsidiary, UnitedHealth Group employs 58,000 providers, with plans to reach 60,000 by the end of the year. The company said it grew the number of fully capitated lives it has under its wing by 250,000 this year to 2.2 million. Meanwhile, Optum’s revenue per consumer grew 30% year-over-year, “reflecting the increasing impact and number of value-based relationships within OptumCare,” CFO John Rex said during the earning’s call.

The company has said that 95% of its 7.3 million Medicare Advantage members are enrolled in four-star plans or higher for the 2022 contract year, with 38% of beneficiaries in five-star plans. The company operates the largest Medicare Advantage footprint in the nation, and is the only payer to tout the AARP name. In 2022, the company will expand its service area to reach 94% of all eligible Medicare consumers, expanding to 3.1 million more people in 276 additional counties.

At least three UnitedHealthcare plans are barred from enrolling new members in 2022 because the company charged too much in premiums and failed to spend enough on patient care.


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