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New Analysis on MA Overpayment

I have argued that a small subset of big plans have given all of Medicare Advantage (MA) a bad name by suspect or fraudulent risk adjustment practices that give them major overpayments. A number of studies have singled out this small group of major plans. Now, the Alliance of Community Health Plans (ACHP), a group that represents local and regional nonprofit payers, has come out with a study building on these earlier findings.

ACHP says that UnitedHealthcare, the biggest MA insurer, collected up to $785 more per beneficiary than local nonprofit plans in 2023, costing Medicare more than $6 billion in excess payments that year. Humana, the second-biggest MA payer, collected $423 more per beneficiary that year than if those members were in ACHP member plans, costing Medicare an additional $4 billion. UnitedHealthcare’s average risk scores were 36.2% higher and Humana’s were 19.2% higher than nonprofit health plan members of ACHP. Earlier studies show annual overpayments for United were $14 billion in 2021.

ACHP wants a new system of accounting for members’ health needs based on patient demographics, such as age, sex, disability status, and on a small list of substantiated health conditions.

Additional articles: https://www.healthcaredive.com/news/unitedhealthcare-humana-medicare-advantage-risk-adjustment-gaming-achp/759120/ and https://www.fiercehealthcare.com/payers/achp-unveils-plan-streamline-ma-risk-adjustment-combat-upcoding-gamesmanship

#medicareadvantage #fwa #riskadjustment #radv #overpayments

https://www.beckerspayer.com/payer/medicare-advantage/medicare-advantage-risk-adjustment-a-failing-system-report

Government Shutdown Looms

Congress has returned to Washington and the GOP has no plan to keep the government running at the end of the month. Democrats are pushing the GOP to have a four-leaders meeting to discuss a consensus, but the House and Senate majorities are pushing other agendas right now. Democratic votes would be needed to keep the government going unless budget reconciliation was used again. That is a tall order if not impossible. The Senate GOP has floated a short-term spending patch to give more time to discuss FFY 2026 funding. But some conservatives in the House and Senate want a full-year extension at FFY 2025 spending levels with additional spending cuts.

There is some bipartisan interest in negotiating a healthcare package before the end of the year. Senators are already discussing this. On the docket is the possibility of extending the Exchange premium subsidy enhancements, but conservatives are likely to oppose that.

#ffy2026 #budget #spending #congress

https://www.politico.com/news/2025/08/28/democrats-press-gop-leaders-for-meeting-as-shutdown-looms-00534355

MA Controls Healthcare Growth For Enrollees

While opponents of Medicare Advantage (MA) are on a campaign to strip MA of all sorts of revenue and bolster the future of the antiquated traditional fee-for-service (FFS) program, many studies show the value of MA from a cost and quality perspective. Now, the UCLA Center for Health Policy Research concludes that Californians enrolled in MA face slower growth in healthcare costs compared to those in FFS.

Between 2013 and 2023, average monthly healthcare costs were $269 in counties with MA enrollment above 20%, compared with $481 in counties below 20%, or a 44% lower cost. Counties with higher MA enrollment saw an 11% increase in monthly healthcare costs over the decade (from $245 to $273), while counties with lower enrollment saw a 54% increase (from $361 to $557).

#medicareadvantage #medicare

https://www.beckerspayer.com/uncategorized/medicare-advantage-plans-keep-senior-care-costs-down-in-california-ucla

More Suits On No Surprises Act

UnitedHealthcare joins the ranks of Elevance Health and Aetna in suing prominent provider entities over the No Surprises Act. United is suing Radiology Partners and its Arizona-based affiliate, Sonoran Radiology, alleging the companies have been “abusing” the No Surprises Act’s independent dispute resolution process. They argue the radiology provider behemoth is “funneling millions into the pockets of its private-equity owners.”

The lawsuit comes after a Health Affairs study that shows that providers overwhelmingly win disputes and are awarded extremely high payments. Another new study also shows that surprise bills have fallen under the act based on data from states that had some protections and those that did not before the national law took effect. The study also notes that the prediction that the process would lower prices and save has not materialized.

The fact remains the law needs major reform, including requiring the qualifying payment amount to have more weight in the process.

Additional article: https://www.fiercehealthcare.com/regulatory/study-suggests-no-surprises-act-protections-are-reducing-patients-out-pocket-costs

#nsa #nosurprisesact #transparency #providers #healthplans

https://www.beckerspayer.com/legal/unitedhealthcare-sues-radiology-partners-over-no-surprises-claims/

State Insurance Commissioners Between The Proverbial Rock And A Hard Place

Modern Healthcare has a good article reviewing the plight this year of the insurance commissioner. Healthcare costs are spiraling, in part due to utilization and in part higher prices throughout the sector. As well, the One Big Beautiful Bill Act (OBBBA) is anything but cheerful for most consumers reliant on the Exchanges. The bill will contract enrollment dramatically. This is leading to greater risk in the program and plan and product exits. The combination of the two have insurers putting in for massive rate hikes in the Exchange program.

Insurance regulators do have a hard task. They need to ensure that insurance rates are affordable and consumers have access to the market. They need to protect against excessive hikes. But they also need to ensure a stable and secure insurance marketplace and that means granting sufficient rate hikes to ensure fiscal soundness.

Pressures, especially political ones, abound right now on insurance regulators as they seek to approve sound yet high rate requests and throw out those that are truly excessive. Regulators do have some history in the Exchanges to look at. Exchanges have had a topsy-turvy  history as Democrats sought to expand coverage and Trump 45 and now 47 sought to contract it. All of this led to massive swings in enrollment, plan participation, networks, choice, and premiums over the years.

In related news, the Colorado General Assembly is considering borrowing $100 million from the state’s unclaimed property trust to assist insurance consumers if enhanced exchange subsidies expire at the end of the year.

(Article may require a subscription.)

#healthplans #margins #rates #exchanges #obamacare #aca

https://www.modernhealthcare.com/politics-regulation/mh-aca-premiums-regulators-oklahoma-colorado/

— Marc S. Ryan

United Probe Expansive

The U.S. Justice Department’s (DOJ) criminal division investigation into UnitedHealth Group has been bigger from the start or has expanded. Latest reports suggest that the company is under investigation into both how it reimburses its owned doctors as well as its pharmacy benefit’s manager’s (PBM — OptumRx) business and billing practices. Previously, it was reported the DOJ was investigating alleged Medicare Advantage (MA) risk adjustment fraud.

In the past, I have talked about how federal regulators might go after vertical integration in the healthcare industry and United is the biggest example. Vertically integrated companies are alleged to unfairly inflate price/cost and skirt the minimum medical loss ratio (MLR) rules by having non-arm’s-length agreements with their related companies to keep revenue and margin within the overall enterprise. Could the PBM and physician investigations be touching this concept? It could also be the case that the incentives given owned doctors as well as other pricing and relationships by the PBM violate fraud and other laws.

Additional articles: https://www.modernhealthcare.com/insurance/mh-doj-unitedhealth-optum-rx-medicare-billing/ and https://www.fiercehealthcare.com/payers/wsj-report-doj-interviewing-former-employees-about-medicare-billing-practices-unitedhealth

#fwa #unitedhealthcare #medicareadvantage #doj #antitrust

https://www.bloomberg.com/news/articles/2025-08-26/unitedhealth-ongoing-criminal-probe-is-broader-than-medicare?accessToken=eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJzb3VyY2UiOiJTdWJzY3JpYmVyR2lmdGVkQXJ0aWNsZSIsImlhdCI6MTc1NjIzNzE4NSwiZXhwIjoxNzU2ODQxOTg1LCJhcnRpY2xlSWQiOiJUMUVFT1ZHT1lNVEQwMCIsImJjb25uZWN0SWQiOiJCMUJDOTdEOTQ3MTg0OUExQkQ4MjIyN0MwMzJCRDQ4MiJ9.HLqQfvutk44IC3lA1IhaIxswFaW_hPb2bFX_nel9CVE&leadSource=uverify%20wall

The Errors Of The No Surprises Act

A great Health Affairs Forefront blog on the huge admin and steep payment costs in the No Surprises Act dispute resolution process. While Americans are being sheltered from surprise bills, the process is a mess and appears to be driving up overall costs in the healthcare system. Further, the process is being abused by a small sunset of greedy private equity-baced provider organizations.

A few findings from the blog:

• Providers have brought far more disputes than anticipated.
• They won 85% of the decisions in 2024.
• Providers receive fees that are three to four times the typical in-network rate.
• The high-volume of disputes is generating significant admin costs as well as higher payments. This will be recognized in overall healthcare costs and premiums.
• At least $5 billion in total costs have accrued through the end of 2024.
• In 2023 and 2024, 43% of resolved line-item claims were filed by two private equity-backed provider organizations: Radiology Partners and affiliates and Team Health. The top five provider organizations were responsible for 59% of line-item claims.

This is a tragedy and Congress needs to get a backbone and amend this provider-slanted law.

(Article may require a subscription.)

#nsa #nosurprisesact #transparency #providers #healthplans #surprisebilling

https://www.healthaffairs.org/content/forefront/substantial-costs-no-surprises-act-arbitration-process

EU-U.S. Tariff Accord Has Drug Tariffs

The EU-U.S. trade accord has established a 15% tariff rate for pharmaceuticals from the EU area. The vast majority of brand drugs consumed in the U.S. (60-75% based on value) are imported from the EU. Pharmaceuticals account for roughly a quarter of U.S. imports from the EU as measured by value. Generic drugs are exempt from the new agreement but remain subject to an earlier 2.5% tariff rate. The new tariff takes effect September 1.

President Trump has indicated that he plans on drug tariffs of as much as 250% over time to promote onshoring. He indicated tariffs would start slowly but eventually rise to that level. Drug costs in the U.S. will likely rise on the brand side due to the tariffs.

#drugpricing #tariffs #brands #generics

https://abcnews.go.com/Business/us-eu-release-details-tariffs-cars-pharmaceuticals/story?id=124843094

HHS Creates Federal Healthcare Advisory Committee

The Department of Health and Human Services (HHS) announced the creation of a Federal Healthcare Advisory Committee, which will drive reforms to restore patient-centered care in the healthcare system. The committee would be a group of experts charged with delivering strategic recommendations to improve how care is financed and delivered across Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), and the Health Insurance Marketplace. Further, the committee would find ways to cut waste, reduce paperwork, expand preventive care, and modernize CMS programs with real-time data and accountability. CMS is currently accepting nominations for committee members and is looking for experts in chronic disease management, financing in federal health programs, and delivery system reform. Individuals can either be nominated by an organization or submit a nomination for themselves.

The advisory committee will focus on developing:

• Actionable policy initiatives to promote chronic disease prevention and management;
• Opportunities for a regulatory framework of accountability for safety and outcomes that reduce unnecessary red tape and allow providers to focus on improving patient health;  
• Levers to advance a real-time data system, enabling a new standard of excellence in care, rapid claims processing, rapid quality measurement, and rewards;  
• Structural opportunities to improve quality for the most vulnerable in the Medicaid program; and
• Sustainability of the Medicare Advantage (MA) program, identifying opportunities to modernize risk adjustment and quality measures to assess and improve health outcomes. 

Additional article: https://www.cms.gov/newsroom/press-releases/hhs-drives-reform-restore-patient-centered-care-announces-request-nominations-members-serve-federal

#cms #hhs #medicare #medicaid #chip #healthcarereform #coverage #interoperability #fwa #exchanges #maha

https://www.fiercehealthcare.com/regulatory/hhs-form-committee-offers-guidance-medicare-medicaid

CVS Caremark Loses Whistleblower Suit

CVS Caremark, the pharmacy benefits manager (PBM) of CVS Health, has been ordered to pay more than $289 million in damages stemming from a 2014 false claims lawsuit.

The court originally set damages at $95 million after finding in favor of the whistleblower and finding CVS Caremark pushed insurers to overbill the Medicare Part D program. The judge has now tripled the settlement because the company’s actions were financially motivated and eroded public trust.

CVS Health said it would challenge the decision.

Additional articles: https://www.modernhealthcare.com/legal/mh-cvs-caremark-medicare-overbilling-lawsuit-2/ and https://www.beckershospitalreview.com/pharmacy/cvs-caremark-ordered-to-pay-290m-in-false-claims-suit/

(Some articles may require a subscription.)

#cvshealth #fwa #partd #aetna

https://www.fiercehealthcare.com/payers/pennsylvania-judge-hits-cvs-289m-fine-whistleblower-suit