Tag Archives: Insurance

DOJ Questions UnitedHealth Doctors Re: Medicare Advantage Upcoding

Posted on by • Posted in Dept of Justice (DOJ), Health Insurance Industry, Medicare Advantage, Medicare Advantage Overpayments, Physician, Physician Diagnosis, Profit, Profit Margin, Profit Model, Profit Motive, UnitedHealthcare, Upcoding • Tagged , , , , • Leave a comment
https://healthcareuncovered.substack.com/p/doj-questions-unitedhealth-doctors?utm_source=post-email-title&publication_id=255152&post_id=167915638&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

I’ve been at this for so long and have seen so much. And it’s hard to overstate how significant the latest revelations from The Wall Street Journal are. According to its reporting, the U.S. Department of Justice’s criminal health care-fraud unit is questioning former UnitedHealth Group employees about the company’s Medicare billing practices regarding how the company records diagnoses that trigger higher payments from taxpayers.

For years, independent policy experts and *some* regulators have warned that the private Medicare Advantage program has become a breeding ground for upcoding and tax dollar waste. The tactic being scrutinized by the DOJ is called “upcoding.” Essentially, Medicare Advantage companies have an incentive to “find” new illnesses — even among patients who might not need additional treatment because the more serious the diagnoses, the bigger the government payouts to the company.

According to the Journal, prosecutors, FBI agents, and the Health and Human Services Inspector General have been asking ex-employees about special training for doctors, software that flags profitable conditions, and even bonuses for physicians who recode patient files. One former UnitedHealth doctor told the Journal that prosecutors inquired about pressure to use certain diagnosis codes and bonus pay for certain health care decisions that financially favored UnitedHealth. 

The Journal’s data shows that UnitedHealth’s members received certain lucrative diagnoses at higher rates than patients in other Medicare Advantage plans — billions of extra dollars that ultimately come from taxpayers. In one example, they reportedly pulled in about $2,700 more taxpayer dollars per patient visit when nurses went into seniors’ homes to hunt for additional conditions.

In a statement, UnitedHealth insists they “remain focused on what matters most: delivering better outcomes, more benefits, and lower costs for the people we serve.”

This latest criminal investigation joins at least two other DOJ probes into UnitedHealth’s billing and potential antitrust violations. And it’s yet another reminder that the Medicare Advantage program — which, much to many advocates alarm, now covers more than half of all Medicare enrollees – is desperately in need of real oversight.

If there’s any silver lining, it’s that courageous former employees are speaking up. They know what I know: This “profit-maximizing” through “upcoding” and “favorable selection” drains billions that could be better spent on actual patient care and pad Wall Street profits.

The Fundamental Problem at the Heart of American Health Insurance

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Administrative Complexity, Administrative Costs, Administrative Workload, Health Insurance Industry, Health Policy, Healthcare Reform, Profit, Profit Margin, Profit Model, Profit Motive, Shareholder Expectations, Shareholder Primacy, Wall Street • Tagged , , , , • Leave a comment
https://healthcareuncovered.substack.com/p/the-fundamental-problem-at-the-heart?utm_source=post-email-title&publication_id=255152&post_id=167813331&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

Administrative waste, denials, and deadly incentives — the U.S. model shows what happens when profit rules.

The United States is the only country where a health insurance executive has been gunned down in the street. But that’s not the only thing that’s unique about American health insurance.

Almost all of our peer countries – advanced, free-market democracies — have health insurance companies. In some cases (Germany, Switzerland, Japan), private health insurance is the chief way to pay for medical care. In others (such as Great Britain), private insurance works as a supplement to government-run health care systems. But there’s a fundamental difference between health insurance elsewhere and the U.S. system. 

In all the other advanced democracies, basic health insurance is not for profit; the insurers are essentially charities. They exist not to pay large sums to executives and investors, but rather to keep the population healthy by assuring that everyone can get medical care when it’s needed. 

America’s health insurance giants are profit-making businesses. Indeed, in the insurers’ quarterly earnings reports to investors, the standard industry term for any sums spent paying people’s medical bills is “medical loss.” They view paying your doctor bill as a loss that subtracts from the dividends they owe their stockholders. 

When I studied health care systems around the world, I asked economists and doctors and health ministers why they want health insurance to be a nonprofit endeavor. Everyone gave essentially the same answer:

There’s a fundamental contradiction between insuring a nation’s health and making a profit on health insurance.

Health insurance exists to help people get the preventive care and treatment they need by paying their medical bills. But the way to make a profit on health insurance is to avoid paying medical bills. Accordingly, the U.S. insurance giants have devised ingenious methods for evading payment — schemes like high deductibles, narrow networks of approved doctors, limited lists of permitted drugs, and pre-authorization requirements, so that the insurance adjuster, not your doctor, determines what treatment you get. 

Other countries don’t allow those gimmicks. In America, the patient pays twice — first the insurance premium, and then the bill that the insurer declines to pay. That’s why Americans hate health insurance companies — as reflected in the tasteless barrage of angry social media commentary aimed at the victim, not the perpetrator, of the sidewalk shooting in 2024  of UnitedHealthcare’s CEO Brian Thompson in New York City. 

Another unique aspect of U.S.-style health insurance is the huge amount of money our big insurers waste on administrative costs. Any insurance plan has administrative expenses; you’ve got to collect the premiums, review the patients’ claims, and get the payments out to doctors and hospitals.

In other countries, the administrative costs are limited to about 5% of premium income; that is, insurers use 95% of all the money they take in to pay medical bills. But the U.S. insurance giants routinely report administrative costs in the range of 15% to 20%.

When the first drafts of the Affordable Care Act (“Obamacare”) were floated on Capitol Hill in 2009, the statutory language called for limiting insurers’ admin costs to 12% of premium income. Then the insurance lobby went to work. The final text of that law allows them to spend up to 20% of their income on salaries, marketing, dividends, and other stuff that doesn’t pay anybody’s hospital bill. 

There is one American insurance system, however, that is as thrifty as foreign health insurance plans. Medicare, the federal government’s insurance program for seniors and the disabled, reports administrative costs in the range of 3% — about one-fifth as much as the big private insurers fritter away. And Medicare’s administrators — federal bureaucrats — are paid less than a tenth as much as the executives running the far less efficient private insurance firms. 

Americans generally believe that the profit-driven private sector is more efficient and innovative than government. In many cases, that’s true. I wouldn’t want some government agency designing my cell phone or my hiking boots.

But when it comes to health insurance, all the evidence shows that nonprofit and government-run plans provide better coverage at lower cost than the private plans from America’s health insurance giants.

If we were to make basic health insurance a nonprofit endeavor, as it is everywhere else, or put everybody on a public plan like Medicare, the U.S. would save billions and improve our access to life-saving care. Then Americans might stop celebrating on social media when an insurance executive is killed. 

The Perfect Storm has Hit U.S. Healthcare

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Healthcare Reform, Lobbyist, Medicaid, Medicaid Cuts, Perfect Storm, Profit, Profit Margin, Profit Motive • Tagged , , , , • Leave a comment
The Perfect Storm has Hit U.S. Healthcare

The perfect storm has hit U.S. healthcare:

  • The “Big Beautiful Budget Bill” appears headed for passage with cuts to Medicaid and potentially Medicare likely elements.
  • The economy is slowing, with a mild recession a possibility as consumer confidence drops, the housing market slows and uncertainty about tariffs mounts.
  • And partisan brinksmanship in state and federal politics has made political hostages of public and rural health safety net programs as demand increases for their services.

Last Wednesday, amidst mounting anxiety about the aftermath of U.S. bunker-bombing in Iran and escalating conflicts in Gaza and Ukraine, the Centers for Medicare and Medicaid Services (CMS) released its report on healthcare spending in 2024 and forecast for 2025-2033:

“National health expenditures are projected to have grown 8.2% in 2024 and to increase 7.1% in 2025, reflecting continued strong growth in the use of health care services and goods.

During the period 2026–27, health spending growth is expected to average 5.6%, partly because of a decrease in the share of the population with health insurance (related to the expiration of temporarily enhanced Marketplace premium tax credits in the Inflation Reduction Act of 2022) and partly because of an anticipated slowdown in utilization growth from recent highs. Each year for the full 2024–33 projection period, national health care expenditure growth (averaging 5.8%) is expected to outpace that for the gross domestic product (GDP; averaging 4.3%) and to result in a health share of GDP that reaches 20.3% by 2033 (up from 17.6% in 2023) …

Although the projections presented here reflect current law, future legislative and regulatory health policy changes could have a significant impact on the projections of health insurance coverage, health spending trends, and related cost-sharing requirements, and they thus could ultimately affect the health share of GDP by 2033.”

As has been the case for 20 years, spending for healthcare grew faster than the overall economy in 2024. And it is forecast to continue through 2033:

 2024Baseline2033Forecast% Nominal Chg.2024-2033
National Health Spending$5,263B$8,585B+63.1%
US Population337,2M354.8M+5.2%
Per capita personal health spending$13,227$20,559+55.7%
Per capita disposable personal income$21,626$31,486+45.6%
NHE as % of US GDP18.0%20.3%+12.8%

In its defense, industry insiders call attention to the uniqueness of the business of healthcare:

  • ‘Healthcare is a fundamental need: the health system serves everyone.’
  • ‘Our aging population, chronic disease prevalence and socioeconomic disparities are drive increased demand for the system’s products and services.’
  • ‘The public expects cutting edge technologies, modern facilities, effective medications and the best caregivers and they’re expensive.’
  • ‘Burdensome regulatory compliance costs contribute to unnecessary spending and costs.’

And they’re right.

Critics argue the U.S. health system is the world’s most expensive but its results (outcomes) don’t justify its costs.  They acknowledge the complexity of the industry but believe “waste, fraud and abuse” are pervasive flaws routinely ignored. And they remind lawmakers that the health economy is profitable to most of its corporate players (investor-owned and not-for-profits) and its executive handsomely compensated.

Healthcare has been hit by a perfect storm at a time when a majority of the public associates it more with corporatization and consolidation than caring. This coalition includes Gen Z adults who can’t afford housing, small employers who’ve cut employee coverage due to costs and large, self-insured employers who trying to navigate around the 10-20% employee health cost increase this year, state and local governments grappling with health costs for their public programs and many more. They’re tired of excuses and think the health system takes advantage of them.

As a percentage of the nation’s GDP and household discretionary spending, healthcare will continue to be disproportionately higher and increasingly concerning.  Spending will grow faster than other industries until lawmakers impose price controls and other mechanisms like at least 8 states have begun already.

Most insiders are taking cover and waiting ‘til the storm passes. Some are content to cry foul and blame others. Others will emerge with new vision and purpose centered on reality.

Storm damage is rarely predictable but always consequential. It cannot be ignored. The Perfect has Hit U.S. healthcare. Its impact is not yet known but is certain to be a game changer.

The Fox Guards the Hen House – Translating AHIP’s Commitments to Streamlining Prior Authorization

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, America's Health Insurance Plans (AHIP), Electronic Pre Authorization, Health Insurance Industry, Health Insurance Pre Authorization, Lobbyist, Medicare Advantage, Medicare Advantage Denials, Prior Authorization, Unnecessary Pre Authorizations • Tagged , , , , • Leave a comment
https://healthcareuncovered.substack.com/p/the-fox-guards-the-hen-house-translating?utm_source=post-email-title&publication_id=255152&post_id=166732339&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

“We urge the Administration to consider the timing of these policies in the context of the broader scope of requirements and challenges facing the industry that require significant system changes.”

  • AHIP, March 13, 2023 (in a letter to CMS Administrator Chiquita Brooks-LaSure responding to CMS’s proposed rule on Advancing Interoperability and Improving Prior Authorization Processes, proposed Final Rule, CMS-0057-P)

“Health insurance plans today announced a series of commitments to streamline, simplify and reduce prior authorization – a critical safeguard to ensure their members’ care is safe, effective, evidence-based and affordable.”

  • AHIP, June 23, 2025 (press release announcing voluntary prior authorization reforms)

What a difference two years make.

After lobbying aggressively to delay implementation of the PA reforms proposed by the previous administration (successfully delayed one year and counting), AHIP, the big PR and lobbying group for health insurers, now claims the mantle of reformer, announcing a set of voluntary commitments to streamline prior authorization.

So naturally, the industry’s “commitments” deserve closer scrutiny. Let’s unpack them. As a former health insurance industry executive, I speak their language, so allow me to translate. AHIP, which has no enforcement power, by the way, claims that 48 large insurers will:

  1. Develop and implement standards for electronic prior authorization using Fast Healthcare Interoperability Resources Application Programming Interfaces (FHIR APIs).Translation: CMS is already requiring all insurers to do this by 2027. We might as well take credit preemptively.
  2. Reduce the volume of in-network medical authorizations. Translation: We already demand hundreds of millions of unnecessary prior authorizations for thousands of procedures and services, so cutting a few (who knows how many?) should be a layup and won’t cut into profits.
  3. Enhance continuity of care when patients change health plans by honoring a PA decision for a 90-day transition period starting in 2026.Translation: We’re already required to do this in Medicare Advantage. And since we delayed implementation of e-authorization until 2027, we’re in the clear until then anyway.
  4. Improve communications by providing members with clear explanations for authorization determinations and support for appeals. Translation: We’re already required by state and federal law to do this. We’ll double-check our materials.
  5. Ensure 80% of prior authorizations are processed in real time and expand new API standards to all lines of business. Translation: We had to promise to hold ourselves accountable to at least one measurable goal. We will set the denominator – we’ll decide which procedures and medications require PA – so we’ll hit this goal, no problem, and we might even use more non-human AI algorithms to do it.
  6. 6. Ensuring medical review of non-approved requests. Translation: People will be relieved we’re not using robots. And we’ll avoid having Congress insist that reviews must be done by a same-specialty physician, as proposed in the Reducing Medically Unnecessary Delays in Care Act of 2025 (H.R. 2433).

Of course, I wasn’t in the room when AHIP drafted these commitments, so take my translations with a grain of salt. But let’s be honest: These promises are thin on specifics, short on accountability, and devoid of measurable impact.

They also follow a familiar script, blaming physicians for cost escalation by “deviating from evidence-based care” and the “latest research”, while positioning PA as a necessary safeguard to protect patients from “unsafe or inappropriate care.” And largely ignoring how PA routinely delays necessary treatment and harms patients.

It’s also rich coming from an industry still reliant on something called the X12 transaction standard – technology that is now over 40 years old – to process prior authorization requests, while simultaneously pointing the finger at providers for outdated technology and being slow to adopt modern systems. Many insurers did not start accepting electronic submissions of prior authorization until roughly 2019, nearly 20 years after clinicians started using online portals such as MyChart in their regular practice. The claim that providers are the ones behind on technology is another ploy by insurers to dodge scrutiny for their schemes.

We shouldn’t settle for incremental fixes when the system itself is the problem. Nor should we allow the industry that created this problem – and perpetuates it in its own self-interest – to dictate the pace or terms of reforming it.

As we argued in our recent piece, Congress should act to significantly curtail the use of prior authorization, limiting it to a narrow, evidence-based set of high-risk use cases. Insurers should also be required to rapidly adopt smarter, lower-friction cost-control methods, like gold-carding trusted clinicians (if it can be implemented with integrity and fairness), without compromising patient access or clinical autonomy.

Letting the fox design the hen house’s security perimeter won’t protect the hens. It’s time for Congress to build a better fence.

What’s at stake from GOP megabill’s coverage losses

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, ACA, Bankruptcy, Chronic Care Management, Chronic Condition Management, Chronic Conditions, Chronic Diseases, Deferred Healthcare, Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, High Deductible Health Plans, High Drug Prices, High Premiums, Medicaid, Medicaid Cuts, Medical Debt, Out of Pocket Expenses, Public Health, Underinsured, Uninsured • Tagged , , , , • Leave a comment

https://www.axios.com/2025/07/01/real-cost-health-coverage-losses

Nearly 12 million people would lose their health insurance under President Trump’s “big, beautiful bill,” an erosion of the social safety net that would lead to more unmanaged chronic illnesses, higher medical debt and overcrowding of hospital emergency departments.

Why it matters: 

The changes in the Senate version of the bill could wipe out most of the health coverage gains made under the Affordable Care Act and slash state support for Medicaid and SNAP.

  • “We are going back to a place of a lot of uncompensated care and a lot of patchwork systems for people to get care,” said Ellen Montz, a managing director at Manatt Health who oversaw the ACA federal marketplace during the Biden administration.

The big picture: 

The stakes are huge for low-income and working-class Americans who depend on Medicaid and subsidized ACA coverage.

  • Without health coverage, more people with diabetes, heart disease, asthma and other chronic conditions will likely go without checkups and medication to keep their ailments in check.
  • Those who try to keep up with care after losing insurance will pay more out of pocket, driving up medical debt and increasing the risk of eviction, food insecurity and depleted savings.
  • Uninsured patients have worse cancer survival outcomes and are less likely to get prenatal care. Medicaid also is a major payer of behavioral health counseling and crisis intervention.

Much of the coverage losses from the bill will come from new Medicaid work reporting requirements, congressional scorekeepers predict. Work rules generally will have to be implemented for coverage starting in 2027, but could be earlier or later depending on the state.

  • Past experiments with Medicaid work rules show that many eligible people fall through the cracks verifying they’ve met the requirements or navigating new state bureaucracies.
  • Often, people don’t find out they’ve lost coverage until they try to fill a prescription or see their doctor. States typically provide written notices, but contacts can be out of date.
  • Nearly 1 in 3 adults who were disenrolled from Medicaid after the COVID pandemic found out they no longer had health insurance only when they tried to access care, per a KFF survey.

Zoom out: 

The Medicaid and ACA changes will also affect people who keep their coverage.

  • The anticipated drop-off in preventive care means the uninsured will be more likely to go to the emergency room when they get sick. That could further crowd already bursting ERs, resulting in even longer wait times.
  • Changes to ACA markets in the bill, along with the impending expiration of enhanced premium subsidies, may drive healthier people to drop out, Montz said, skewing the risk pool and driving up premiums for remaining enrollees.
  • States will likely have to make further cuts to their safety-net programs if the bill passes in order to keep state budgets functioning with less federal Medicaid funding.

The other side: 

The White House and GOP proponents of the bill say the health care changes will fight fraud, waste and abuse, and argue that coverage loss projections are overblown.

Reality check: 

Not all insurance is created equally, and many people with health coverage still struggle to access care. But the bill’s impact would take the focus off ways to improve the health system, Montz said.

  • “This is taking us catastrophically backward, where we don’t get to think about the things that we should be thinking about how to best keep people healthy,” she said.

The bottom line: 

The changes will unfold against a backdrop of Health Secretary Robert F. Kennedy Jr.’s purported focus on preventive care and ending chronic illness in the U.S.

  • But American health care is an insurance-based system, said Manatt Health’s Patricia Boozang. Coverage is what unlocks access.
  • Scrapping millions of people’s health coverage “seems inconsistent with the goal of making America healthier,” she said.