UnitedHealth sees coming fight over Medicare Advantage
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UnitedHealth Group is bracing for scrutiny from the Trump administration over the way it and other Medicare Advantage insurers bill the government, along with other cost-related topics, an executive at the health company told Axios.
Why it matters: Mehmet Oz's characterization of the Medicare Advantage system as "upside down" during his Senate confirmation hearing to become Centers for Medicare and Medicaid Services administrator on Friday may have surprised those who assumed he'd enter office as a champion for the program.
Driving the news: Oz pointed to the way the U.S. pays more for Medicare Advantage than traditional Medicare and specifically discussed the practice of "upcoding," in which insurers categorize patients as sicker in order to get higher payments.
- "I pledge if confirmed, I will go after it," he said.
- Oz also brought up prior authorization in MA, saying it could be streamlined and is a "pox on the system," Axios Pro reported.
- He floated limiting the number of procedures subject to prior authorization by insurers at 1,000, and said reviews should happen more rapidly, including through the use of AI tools.
State of play: A growing chorus of MA critics, including a federal watchdog, has been calling for more scrutiny of the program.
- UnitedHealth, the biggest MA insurer, has specifically been accused of gaming the system in order to extract high payments from the federal government. The company has denied the accusations.
- Health insurer trade group AHIP says it will engage with the new administration on MA, which now cares for more than half of all Medicare beneficiaries.
- "More than 34 million Americans choose Medicare Advantage because it provides them better care at lower costs than fee-for-service. We look forward to working with the administration and Congress to protect and strengthen Medicare Advantage," Mike Tuffin, CEO of AHIP, said in a statement.
What they're saying: "We're excited to have a conversation" about whether to continue the push for value-based care or to "stay stuck in fee-for-service, which is volume-based and which is doing nothing to actually improve people's health," a UnitedHealth Group executive said at an Axios event sponsored by the company, hours after Oz's remarks. The executive was granted anonymity so they could speak freely about the breaking news.
- "Part of that conversation is about coding, and diagnosing whether patients are sick and if so, what can we do about it?" the executive said.
- The executive referred to a recent special master's ruling that the Justice Department failed to prove a long-running claim that UnitedHealth Group exaggerated how sick MA patients were, leading to more than $2 billion in overpayments to the insurer.
- "That's probably our best example of, let's have this conversation about Medicare Advantage," the executive said.
On Monday, the Better Medicare Alliance launched a video ad urging President Trump to "secure and protect" Medicare Advantage, a further signal that some industry players see threats to the program looming ahead.
- "We share Dr. Oz's goal of strengthening Medicare Advantage for seniors and taxpayers, and we look forward to working with him on policy solutions to accomplish this," Mary Beth Donahue, CEO of the group, told Axios in a statement after Friday's hearing.
- The first major test of the administration's stance toward the program will occur in the coming weeks, when it will finalize MA payment rates for next year.
The big picture: The entire health care sector should prepare not only for heavy scrutiny, but also for a flurry of activity from the Trump administration, the UnitedHealth executive said.
- Citing reports that HHS Secretary Robert F. Kennedy Jr. is interested in overhauling the way Medicare pays physicians, the executive said big ideas shouldn't be dismissed as too difficult to actually happen. So far, the administration doesn't "seem challenged by prior constraints."
- "I think everything's on the table for a lot of different industries in the health care sector," the executive added. "And so I think we are now about to live the future of health care."
