JustCare

Tag: UnitedHealth

  • DOJ takes on health insurers for price-fixing

    DOJ takes on health insurers for price-fixing

    In a significant move, the DOJ filed a “statement of interest” in federal court this week, siding with hundreds of physicians who accuse top insurers and a firm formerly known as MultiPlan — now rebranded as Claritev — of conspiring to fix prices for out-of-network care.

    The DOJ’s involvement doesn’t just add legal firepower. It sends a signal that this case matters. More importantly, it casts a harsh spotlight on how major insurers including UnitedHealthcare, Aetna, Cigna and Elevance may have skirted antitrust laws through a so-called “third-party intermediary” — and whether Wall Street has been too confident in the impunity these corporations usually enjoy.

    According to reports, the DOJ rebuffed Claritev’s argument that there was no price-fixing conspiracy simply because insurers may use the company’s algorithm differently. The Sherman Antitrust Act, the DOJ pointed out, is clear: even setting a “starting point” for prices — if done in coordination — can be anti-competitive. And sharing sensitive pricing data through a middleman? That’s also potentially illegal.

    As someone who spent years inside the health insurance industry, I can tell you that what’s at stake here is nothing short of enormous. If this lawsuit proceeds, we might finally get a clearer picture of how these corporations — working together under the cover of a “neutral” analytics firm — manipulated payment rates to increase profits, all while starving frontline health care providers.

    Claritev and its insurer partners, of course, deny the allegations and have moved to dismiss the case. But the DOJ’s filing now stands in their way.

    Some history: The backstory adds even more weight to the DOJ’s action. In 2023, a New York Times investigation uncovered how Claritev (then MultiPlan) operated under a perverse incentive: the more it “saved” insurers and their corporate clients by underpaying doctors, the bigger the cut Claritev and insurers took for themselves. That same year, Senator Amy Klobuchar called on federal regulators to investigate what she and many providers viewed as algorithm-enabled price-fixing. She even introduced legislation to stop corporations from using AI tools to coordinate pricing.

    The DOJ statement of interest comes just weeks after the agency launched an investigation into UnitedHealth Group’s Medicare billing practices. As the Wall Street Journal reported, the DOJ “is examining the company’s practices for recording diagnoses that trigger extra payments to its Medicare Advantage plans, including at physician groups the insurance giant owns.”

    For years, insurers have been able to hide behind complex data systems, AI algorithms and opaque contracting practices to squeeze providers — and boost profits. Investors have generally assumed that neither Congress nor federal regulators would seriously challenge that model.

    But this latest move by the DOJ suggests otherwise. Maybe — just maybe — the Trump Administration will be tougher on insurers than investors expected. And if that is true, it would be a long-overdue course correction – for doctors, patients and taxpayers.

    [Note: This post was originally published on Wendell Potter’s Substack, HEALTH CARE un-covered.]

    Here’s more from Just Care:

  • UnitedHealth overbills the VA by hundreds of millions of dollars

    UnitedHealth overbills the VA by hundreds of millions of dollars

    At a recent Congressional hearing in Washington, Rep. Mark Takano (D-California), the top Democrat on the House Veterans Affairs Committee, directed a series of questions to the CEO of the health care company Optum, a wholly owned subsidiary of UnitedHeath Group. The exchange helped expose an alarming and growing problem in veterans’ health care in this country: massive overbilling by large, for-profit insurance conglomerates.

    Takano’s questioning was a master class, and you should watch it. You can see a taste of it here.

    What Rep. Takano exposed is that massive health care companies are enriching themselves at the expense of our nation’s Veterans.

    At issue is the Veterans’ Community Care Program, which facilitates medical care for veterans provided by health care professionals outside of the Veterans Health Administration (VHA).

    The program is administered by big health insurance companies, including Optum and TriWest. Data compiled by federal investigators shows that these insurers, often called third-party administrators (TPAs), overbill the government in a similar way that insurers selling Medicare Advantage plans do, as HEALTH CARE uncovered has reported.

    Department of Veterans Affairs Office of the Inspector General (OIG) February 2025 report.

    The investigators looked under the hood of these companies and found some real troubling signs. Their February 2025 report – published by the Department of Veterans Affairs Office of the Inspector General (OIG) – found that the VHA overpaid its TPAs by more than $1 billion between 2020 and 2024.

    The largest recipient was UnitedHealth Group’s Optum, which received overpayments of more than $105 million from 2020 to 2022. TriWest was overpaid $73.4 million from 2020 to 2023. The OIG found the overpayments were a result of the companies charging the VHA incorrect rates.

    For example, Optum reportedly overcharged the VHA by $783.4 million between 2020 and May 2024 for dental services provided by community care providers. Investigators said Optum was able to charge the extra amount because of a technicality in the contract: there was no language that specifically prevented Optum from charging the VHA more than it was reimbursing the community care provider for the service.

    It turns out this is not a new problem. An OIG report from 2021 found that providers providing care for veterans through the Community Care Program billed for higher paying evaluation and management services codes at much higher rates than other doctors in the same specialty. That’s evidence of upcoding. The report also found that providers were potentially double billing for services provided by entering additional codes already covered by a global surgery code. These additional codes cost the VA $59.6 million from between 2020 and 2022.

    Kudos to Rep. Takano for raising this important issue and his efforts to protect the integrity and solvency of the VA program and hold the insurance companies accountable.

    [This post was originally published on March 18, 2025 on Health Care un-covered.]

    Here’s more from Just Care:

  • Senator Grassley takes on UnitedHealth Medicare Advantage overpayments

    Senator Grassley takes on UnitedHealth Medicare Advantage overpayments

    One moderate Republican Senator is concerned about the billions of dollars in government overpayments to UnitedHealth Medicare Advantage. Senator Chuck Grassley, who chairs the Senate Judiciary Committee, sent UnitedHealth CEO Andrew Witty a letter demanding that he release information on the company’s Medicare Advantage government billing practices.

    Countless reports and analyses show that the big Medicare Advantage insurers are overbilling Medicare to the tune of as much as $140 billion a year. The Medicare Payment Advisory Commission more conservatively estimates $83 billion in overpayments last year alone. But UnitedHealth won’t acknowledge that engaging nurses to add diagnoses to their enrollees’ medical records, even when the nurses have no clue what the diagnoses mean and perform no additional tests to determine additional diagnoses, is at the very least wrong, if not outright fraud.

    Senator Grassley wants UnitedHealth to provide Congress will lots of information about their billing practices. Grassley alleged apparent fraud, waste and abuse at UnitedHealth. In 2021, UnitedHealth allegedly benefited to the tune of $8.7 billion from overbilling the government.

    “Despite these oversight efforts, [Medicare Advantage Organizations] continue to defraud the American taxpayer, costing them billions of dollars a year … The apparent fraud, waste, and abuse at issue is simply unacceptable and harms not only Medicare beneficiaries, but also the American taxpayer,” Grassley wrote. Everyone with Medicare pays higher Part B premiums as a result of the overpayments, and the overpayments are eating into the Medicare Trust Fund.

    Grassley wants Congress to examine UnitedHealth’s training manuals, guidance documents, compliance program details, audit results and other documents.

    To be clear, UnitedHealth is the largest Medicare Advantage insurer and, consequently, likely to be reaping the greatest amount in overpayments. But, Humana, CVS Health and Anthem are also beneficiaries of these overpayments. According to the Congressional Budget Office, ending these overpayments would mean $1 trillion in savings over the next ten years.

    Here’s more from Just Care:

  • Does UnitedHealth use flawed AI to deny care in Medicare Advantage?

    Does UnitedHealth use flawed AI to deny care in Medicare Advantage?

    Bob Hermann reports for StatNews that a case against UnitedHealth for using flawed AI algorithms to deny care to Medicare Advantage enrollees is making it way through the US District Court in Minnesota. (A similar suit has been filed against Humana, which uses the same AI system as UnitedHealth.) Will the judge agree that the artificial intelligence (AI) system is flawed and remedy the issue? First, the judge must find he has the authority to rule on this issue.

    UnitedHealth has moved to dismiss the case on the ground that plaintiffs have not worked their way through the lengthy appeals process and that federal Medicare law preempts state law. The judge will decide on that motion as early as this month. But, the stories of enrollees denied basic critical care by UnitedHealth abound. One older man, Frank Perry, needed rehab care to regain his strength after a brain disorder that caused him to fall a lot and landed him in the hospital each time. He couldn’t get it.

    UnitedHealth would only approve skilled nursing home care for Perry. Skilled nursing care is less costly than rehab care. Moreover, UnitedHealth only approved nursing care for two weeks, even though Medicare covers this care for up to 100 days when medically reasonable and necessary. Perry kept challenging the denials but he ended up dying before resolution of his case.

    UnitedHealth says it does not rely exclusively on AI to deny care. But, Stat got hold of UnitedHealth materials that run contrary to UnitedHealth’s claim. For sure, people who appeal win, more than four out of five times, suggesting that many denials are inappropriate. Unfortunately, most people don’t know to appeal or how easy it is to do so.

    Keep in mind that people enrolled in traditional Medicare do not face these barriers to care. As a general rule, they get the care they need when they need it.

    Here’s more from Just Care:

  • Will UnitedHealth stop denying care inappropriately or simply deny doing so?

    Will UnitedHealth stop denying care inappropriately or simply deny doing so?

    Shareholders at UnitedHealth are proposing that the company study and report publicly on the financial and public health consequences of its policies that lead to delays and denials of health care. These shareholders want people to vote on their request at UnitedHealth’s annual meeting, reports Rylee Wilson for Becker’s Payer.

    Specifically, the shareholders want UnitedHealth to report on the frequency of delays of care and foregone care, as well as harm to patients, resulting from UnitedHealth’s prior authorization requirements. Put differently, they want the company to disclose how its prior authorization requirements affect access to treatment.

    UnitedHealth claims it will respond to these shareholders once it schedules its annual meeting in June. The shareholders, represented by the Interfaith Center on Corporate Responsibility, represent more than 300 institutional investors. (UnitedHealth has more than 5,000 institutional investors.)

    The shareholders argue that these inappropriate delays and denials might boost short-term profits, but they risk hurting the UnitedHealth brand.

    Wendell Potter, head of the Center for Health and Democracy, explains that the inappropriate care denials harm more than patients. UnitedHealth defends its behavior saying that it pays 90 percent of claims, which might be true. The problem is that the 10 percent of claims it denies are often for coverage of expensive life-saving or otherwise critical care.

    Meanwhile, UnitedHealth is poised to announce big year-end profits. Some say UnitedHealth will have more than an eight percent year-over-year earnings growth. Fourth-quarter earnings are projected to be about $6.72 a share. If so, it would be a 9.1 percent increase from last year’s fourth quarter.

  • UnitedHealth physicans help boost insurers’ Medicare payments

    UnitedHealth physicans help boost insurers’ Medicare payments

    UnitedHealth now employs or contracts with about 10 percent of the physicians in the US. It’s one way UnitedHealth maximizes Medicare Advantage profits, report Anna Wilde Mathews, Christopher Weaver and Tom McGinty for the Wall Street Journal. UnitedHealth incentivizes its physicians to include additional diagnoses codes on Medicare Advantage patient records, which enables UnitedHealth to receive higher Medicare payments.

    UnitedHealth advises its physicians to check their Medicare Advantage patients for certain diagnoses. So, in Eugene, Oregon, one physician explained that before he could move from one patient to another, he must enter into a software system whether his patient had any of a list of diagnoses. In many cases, the diagnoses had nothing to do with the patient, such as hyperaldosteronism, which is a hormone condition related to high blood pressure.

    Rather than ensuring their doctors focus on treating Medicare Advantage patients for the conditions these patients are reporting, UnitedHealth is focused on having its doctors document as many conditions as possible that will increase the company’s Medicare payments.

    UnitedHealth does nothing to ensure its doctors document additional conditions for their patients in traditional Medicare. That’s not surprising.  Because of the way Medicare pays insurers in Medicare Advantage, adding diagnoses codes to traditional Medicare patient records would hurt UnitedHealth financially.

    The Wall Street Journal found that patients leaving traditional Medicare for Medicare Advantage in the three years ending 2022 had many more diagnoses in their medical records once they were in Medicare Advantage. Their “sickness scores” typically increased 55 percent. To put it succinctly, once in Medicare Advantage, from a sickness perspective, patients effectively had HIV and breast cancer.

    While UnitedHealth does more than other insurers to raise sickness scores for its Medicare Advantage patients, other insurers raised scores by 30 percent for new patients in Medicare Advantage. There is no evidence whatsoever that entering more diagnoses into Medicare Advantage enrollees’ medical records benefits patients in any way. In fact, UnitedHealth doctors do not use the company’s diagnoses software for patients outside of Medicare Advantage.

    By the Wall Street Journal’s calculations, United’s Medicare Advantage enrollees who saw UnitedHealth physicians had such high sickness scores that UnitedHealth benefited financially to the tune of $4.6 billion over three years.

    This insurer gaming of the Medicare payment system must end. Among other things, it is gouging taxpayers, depleting the Medicare Trust Fund, and driving up Medicare Part B premiums.

    Here’s more from Just Care:

  • Pharmacy middlemen are responsible for hundreds of pharmacy closures so far, in 2025

    Pharmacy middlemen are responsible for hundreds of pharmacy closures so far, in 2025

    Benjamin Jolley writes for substack on how the big insurers are deploying their pharmacy benefit managers (PBMs) to decimate independent pharmacies. This year alone 2,275 pharmacies have closed to date. Why? Because the PBMs, who are responsible for designing insurer formularies and reimbursing pharmacies for dispensing prescription drugs, don’t pay independent pharmacies appropriately.

    In case you’re wondering, United Health owns Optum Rx and steers lots of business to its subsidiary. It can and does apparently pay its subsidiaries high rates and other retail pharmacies low rates for the same drugs. That’s uet another way it can rip off consumers and benefit its shareholders. CVS and Cigna are alleged to engage in the same shenanigans through the PBMs they own.

    Jolley composed a dataset of pharmacies active in the National Council of Prescription Drug Programs (NCPDP) database at the beginning of this year, which were not on the database eight months later. Here’s what he found:

    • 1139 large chain pharmacies closed.
    • 1136 independent pharmacies and small to mid-sized chain pharmacies closed.
    • 298 pharmacies changed ownership.

    Jolley then created a map:

    Based on his findings, Jolley reports that employees at 2,300 pharmacies all lost their jobs. Consequently, he estimates that 23,000 people were affected, as pharmacies tend to employ an average of 10 people.

    Because 857 new pharmacies opened during the first eight months of the year, net pharmacy closures total 1,720, or 2.8 percent fewer pharmacies.

    Since January 1, 2024, according to Jolley:

    • ~5 pharmacy owner-operators have closed their businesses permanently
    • ~11 neighborhoods lost their pharmacy
    • ~110 pharmacists and pharmacy technicians have been laid off

    Why is this happening? PBMs are underpaying for drugs. Independent pharmacies are forced to pay the big prescription drug wholesalers a lot higher rates than the chain drug stores pay. Jolley supports bills in Congress to fix the PBM problem.

    • H.R. 9096, the Pharmacists Fight Back Act: If passed, this bill would make payments to pharmacies fair and predictable. It would ensure pharmacies are paid based on the actual cost of goods with a 2% markup plus a cost-of-dispensing fee.
    • A Glass-Steagall for Healthcare – Glass-Steagall created a wall between community banking and investment banking. We need to do something similar with health care so that big companies can’t take advantage of competitors through passing money and business through their subsidiaries. The same company should not own both PBMs and pharmacies. Insurers should not own providers. United Healthcare owns OptumRx, Optum Specialty Pharmacy and Optum Physicians Group. CVS/Caremark owns Aetna and CVS/Pharmacy. Health Insurers should not own physician practices.
    • Robinson Patman Act enforcement – a PBM should not be allowed to charge different prices for identical products.

    Jolley explains that more than 70 percent of the money pharmacies receive is from government–Medicare, Medicaid, ACA and FEHBP and Tricare. Government needs to enact reforms to save independent pharmacies.

    Here’s more from Just Care:

  • Americans are extremely angry about US health care

    Americans are extremely angry about US health care

    The murder of UnitedHealthcare CEO, Brian Thompson, has revealed extraordinary anger among Americans over our health care system. Will Congress finally act to guarantee people access to needed care and prevent insurers from inappropriate delays and denials of care? Likely not.

    Tens of thousands of people on social media reacted unsympathetically to the killing. ““When you shoot one man in the street it’s murder,” one person posted on the social media site X. “When you kill thousands of people in hospitals by taking away their ability to get treatment you’re an entrepreneur.”

    Wendell Potter, a former Cigna exec and whistleblower, explains on CNN how the CEO’s murder happened just ahead of a shareholder and investor meeting of UnitedHealthcare. UnitedHealthcare satisfies its investors through restricting access to care. That’s how UnitedHealthcare maximizes profits.

    Potter explained that “There’s a lot of just pent-up outrage at this company and other companies that are middlemen that are standing between a patient and his or her doctor or hospital.” For their part, Minnesota physicians report excessively high denial rates by UnitedHealthcare.

    As a result of insurance company practices, people are not getting the medically necessary care they need. The casings on the bullet of the gunman who killed Thompson echo the practices of the insurers: “delay” and “deny.”

    According to the Minnesota Star Tribune, United Healthcare also has been accused of relying on a claims process, supported by artificial intelligence, that had a 90% error rate in determining whether a requested treatment was medically necessary.”

    The Star Tribune further reports on UnitedHealthcare’s insanely high denial rates. In 2021, “UnitedHealth’s qualified health plans in Arizona denied almost 39% of in-network claims.” UnitedHealthcare is the largest health insurer in the US. Another 16 smaller insurers had denial rates that were above 30%.

    Only a few days ago, Anthem decided not to go forward with a proposal to limit anesthesia coverage for certain surgeries and other procedures. It appeared to act in response to massive outrage at the policy. Had Anthem moved forward with the proposal, it would have driven up health care costs for Americans and maximized profits for the insurer.

    Here’s more from Just Care:

  • Insurers focus on Medicare Advantage Special Needs Plans to maximize profits

    Insurers focus on Medicare Advantage Special Needs Plans to maximize profits

    Laura Beerman writes for HealthLeaders about how Medicare Advantage insurers are making out like bandits from offering care to people in Medicare Advantage “Special Needs Plans” or SNPs. Insurers like the Medicare Advantage program because they profit more from Medicare Advantage plans than from other insurance they offer. Providing Medicare coverage to people who have both Medicare and Medicaid in D-SNPs is even more lucrative than providing Medicare coverage to people who have only Medicare.

    Medicare Advantage Special Needs Plans are intended to cover people with Medicare and Medicaid, people with chronic or disabling conditions, including people with diabetes, HIV/AIDS, and dementia, as well as people living in a nursing home or requiring nursing care at home. But, it is not clear that most of the SNPs actually provide people with good Medicare benefits from high quality providers. People eligible for SNPs should seriously consider traditional Medicare, which makes it easy to get care from the providers you want to see anywhere in the US. People with Medicare and Medicaid generally have no out-of-pocket costs in traditional Medicare.

    Insurers are getting an increasing number of SNP enrollees. The number of SNP enrollees has doubled in the last five years. Insurers are also offering more SNP plans. Insurers make twice the profits from SNPs covering people with Medicare and Medicaid than they do from people without Medicaid in Medicare Advantage plans.

    It’s not clear whether people in SNPs understand what they are giving up when they opt for a SNP instead of traditional Medicare. People with Medicare and Medicaid in SNPs tend to be especially vulnerable, in poor health and living on small incomes, struggling to make ends meet. They also often struggle to keep their Medicaid eligibility.

    The Biden administration made it a little harder for the Medicare Advantage insurers to run away with as many taxpayer dollars as they’d like. As a result of some reforms that rein in Medicare Advantage payments a little, the Medicare Advantage market is changing somewhat. Insurers want big profits. So, some insurers have ended some Medicare Advantage plans that are less profitable.

    More than half of people in D-SNPs (people with Medicare and Medicaid) are in either a UnitedHealth Medicare Advantage plan or a Humana Medicare Advantage plan.

    Here’s more from Just Care:

  • UnitedHealth, CVS and Cigna helped fuel opioid crisis

    UnitedHealth, CVS and Cigna helped fuel opioid crisis

    [Editor’s note: I am reposting this piece because it brilliantly exposes how the drug middlemen “PBMs,” who are supposed to be delivering value to Americans, deliver value primarily to themselves and the insurers they work for. They push opioids to vulnerable Americans without prior authorization because they make hundreds of millions of dollars doing so, even when they know that these opioids are killing people.]

    A recent Barron’s exposé detailing pharmacy benefit managers’ (PBMs) backroom dealings in the opioid crisis should be read by everyone. PBMs, which most Americans encounter only indirectly through their health insurance plans, have quietly amassed enormous power over which medications we have access to — and how much they cost. This power extends not only to routine prescriptions but also, as it turns out, to some of the most devastating public health crises of our time.

    The report reveals that the largest PBMs — CVS Caremark, UnitedHealth’s Optum Rx, and Cigna’s Express Scripts — were heavily involved in the distribution of OxyContin, a drug at the center of the opioid epidemic. Between 2016 and 2017, these companies raked in more than $400 million in fees and rebates from Purdue Pharma, OxyContin’s manufacturer. That these rebates were essentially tied to the volume of opioids sold is not just alarming — it’s emblematic of how these middlemen prioritize profit over public health.

    The role of PBMs in drug pricing and availability has been contentious for years. The middlemen argue that their rebate system helps lower costs for employers and insurance plans, but this claim often falls apart under scrutiny. As Barron’s found, PBMs received as much as 19.75% in rebates from OxyContin sales, depending on the dosage and the number of pills prescribed. The higher the dosage, the bigger the rebate and profits. This system, which rewards higher utilization of a dangerous opioid, contradicts the PBMs’ – like CVS Caremark’s – own professed claims of fighting opioid abuse.

    For years, PBMs have presented themselves as crucial gatekeepers, using their clout to negotiate lower drug prices. But the reality, as the article highlights, is far murkier. PBMs, including CVS Caremark and Express Scripts, claim they pass the majority of rebates back to their clients — figures as high as 99%. Yet, these rebates are negotiated in secret, and consumers rarely see the benefits. The rebates often serve to maintain PBMs’ relationships with drugmakers, who want to secure prime placement on formularies — the list of drugs an insurance plan covers.

    The opioid crisis, as Barron’s demonstrates, could be a chilling preview of how PBM-driven rebate schemes might contribute to other drug pricing scandals. If PBMs have been willing to accept massive rebates from Purdue Pharma in exchange for keeping OxyContin widely available during a deadly opioid epidemic, what other drugs have been pushed to the forefront based on financial incentives rather than medical necessity or effectiveness?

    The documents that Barron’s obtained, many of which were previously confidential, show that PBMs had ample opportunity to stem the tide of opioid overprescribing. They could have placed stricter limitations on OxyContin or required prior authorization (which they make significant use of for medically necessary medications) to ensure that the drug was being prescribed appropriately. Instead, they allowed Purdue to maintain a stronghold on the market. According to memos, PBMs even demanded higher rebates as the opioid epidemic worsened.

    As the article suggests, this isn’t merely a historical issue. The opioid crisis may have peaked in the late 2010s, but its effects are still being felt today. And the practices of PBMs — opaque rebate deals, backroom negotiations and a relentless focus on profit — are still very much in place. While Purdue Pharma and its executives have been held accountable through legal settlements, PBMs have largely escaped similar consequences. The lawsuits against PBMs for their role in the opioid crisis are still ongoing, and CVS Caremark’s $5 billion settlement, finalized last year, didn’t even require an admission of wrongdoing.

    This begs a larger question about the pharmaceutical supply chain as a whole. If PBMs have the power to negotiate how drugs like OxyContin are covered, and if their decisions are driven by maximizing profits through rebates, can they really claim to be stewards of affordable health care? (Regular readers of this newsletter should roll their eyes at that question.)

    For too long, PBMs have operated with little transparency. As the Barron’s investigation shows, this secrecy has allowed them to profit handsomely from one of the deadliest public health crises in U.S. history. The opioid crisis could be the most egregious example of PBM malfeasance, but it’s far from the only one. As long as PBMs continue to operate without appropriate oversight, the American public will remain vulnerable to their influence over drug prices — and, by extension, their health.

    Here’s more from Just Care: