Report: UnitedHealth Group tops list of Medicare Advantage insurers receiving billions in questionable payments

UnitedHealth Group stood out from its peers in a new federal watchdog report that questions how Medicare Advantage insurers have used diagnosis data to boost payments from the government program for seniors by billions of dollars.

The Minnetonka-based company was the biggest recipient of the add-on funds for 2023, according to the report this week from the Office of the Inspector General (OIG) at the U.S. Department of Health and Human Services.

UnitedHealth Group said the OIG report was wrong. The watchdog agency published similar findings three years ago, which UnitedHealth also rejected at the time as misleading and inaccurate.

Medicare Advantage (MA) is a privatized version of the federal health insurance program for seniors, where the government hires health plans to manage care for patients and pays companies more when seniors need more treatment.

The OIG report focused on instances where MA insurers received additional payments from Medicare based on assessments that their patients were sicker than average and at risk for higher-than-average expenses, yet the patients apparently did not receive treatment for conditions documented by those reviews.

Such health assessments can be part of annual wellness visits for seniors, and they’re used to collect information about their health status, risks and daily activities. The watchdog agency took particular aim at assessments performed in patients’ homes, saying they may be more vulnerable to misuse since they’re often are administered by MA plans themselves or third-party vendors — not patients’ own health care providers.

“Diagnoses reported only on enrollees’ [health risk assessments] and HRA-linked chart reviews, and not on any other 2022 service records, resulted in an estimated $7.5 billion in MA risk-adjustment payments for 2023,” the OIG reported. “Taken together, in-home HRAs and the subset of chart reviews that relied upon in-home HRAs generated an estimated $4.2 billion of the total $7.5 billion in risk-adjustment payments.”

OIG called on the federal Centers for Medicare and Medicaid Services to impose restrictions on the use of diagnoses reported only on in-home assessments or related chart reviews.

The Medicare agency disagreed, saying OIG failed to perform medical record reviews to document inaccuracies. CMS says it already has rules and regular audits to make sure risk adjustment data used by insurers is valid, including what is collected during in-home assessments, Medicare Administrator Chiquita Brooks-LaSure wrote in a letter published with the report.

“Risk-adjusted payments ensure that a plan is paid more for a sicker enrollee than a healthier enrollee, which helps ensure that MA organizations are paid appropriately to provide the services that their enrollees need,” Brooks-LaSure wrote.

UnitedHealth Group rejected OIG’s findings, saying the report presented a “misleading, narrow and incomplete” view of risk adjustment data to “draw inaccurate conclusions” about the company’s program for providing in-home assessments to vulnerable seniors in Medicare.

“The 45-60 minute in-home visits provided by highly trained and board-certified advanced practice clinicians are among the most comprehensive and thorough assessments of a patient’s health and physical environment available in the health care system, helping to identify and drive needed follow-on care for the vast majority of the patients with whom we engage,” the company said in a statement.

Medicare is the massive federal health insurance program for seniors and people with disabilities. In recent years, a growing share of beneficiaries have opted to receive their government-backed coverage through MA health plans sold by private health insurers.

Last year, about half of all beneficiaries, or 32 million people, enrolled in the MA program, accounting for $448 billion of the overall $1 trillion in annual Medicare costs.

For each enrollee, MA companies receive a fixed or “capitated” payment that reflects the expected cost of providing a beneficiary’s care. Treatment needs vary, so Medicare Advantage plans submit data to justify higher reimbursement for patients with more health problems.

Critics say this gives health insurers an opportunity to game the system.

“The risk-adjustment payment policy creates financial incentives for MA companies to misrepresent enrollees’ health statuses by submitting unsupported diagnoses to CMS for additional conditions that inappropriately inflate their risk-adjustment payments,” the OIG report says. “Unsupported risk-adjustment payments have been a major driver of improper payments in the MA program.”

The government encourages MA plans to conduct health risk assessments, believing they will drive better-coordinated care for seniors. But the Medicare Payment Advisory Commission has published on how diagnoses identified solely during in-home assessments may be less accurate because they’re often based on self-reporting by seniors or require verification with equipment that’s not available at the time.

MA companies also may add diagnoses to patient service records using chart reviews, where health plans retrospectively review medical records to identify diagnoses a health care provider did not submit or might have submitted in error.

The new report found insurers received $7.5 billion in risk-adjustment payments for 1.7 million patients with diagnoses based on health risk assessments, or HRA-linked chart reviews, where OIG couldn’t find evidence in a Medicare encounter database of any visits, procedures, tests or supplies for these diagnoses.

This lack of data raises concerns, OIG said, that either “diagnoses are inaccurate and thus the payments are improper or ... enrollees did not receive needed care for serious conditions.”

The risk adjustment payments were split across 157 out of 170 MA health insurers.

The report highlighted 20 MA companies whose share of payments from HRAs and HRA-linked chart reviews seemed disproportionately high. The list included UnitedHealth Group, which received about $3.7 billion in these risk adjustment payments, and Kentucky-based Humana, which had the second-highest sum at $1.7 billion.

In a statement, Humana defended its use of health risk assessments, saying they “complement and support the care provided by primary care physicians and patients are always referred back to their physicians for follow-up care.”

HealthPartners also appeared on the top 20 list, receiving nearly $15.9 million from these risk-adjustment payments. The Bloomington-based health insurer did not immediately respond to a request for comment.

The OIG report noted that “one top MA company, UnitedHealth Group, stood out from its peers, especially in its use of in-home HRAs and HRA-linked chart reviews to generate risk adjusted payments.”

The company covered about 28% of all MA enrollees in 2022, according to OIG, but received roughly two-thirds of risk-adjusted payments from diagnoses reported only on in-home HRAs and HRA-linked chart reviews.

UnitedHealth Group argued the vast majority of diagnoses added during these visits do not result in higher risk adjustment payments.

“In-home care provides critical links to primary care,” the company’s statement said. “In fact, 75% of our seniors visited a physician within 90 days of an in-home visit and we were able to connect more than half a million seniors to needed social services like food and transportation through these visits.”

Brooks-LaSure, the Medicare administrator, wrote that her agency will continue to weigh the value of home visits for the health care and social needs of beneficiaries.

“Any evaluation of concerns and exploration of policy solutions around HRAs needs to address the complexities of whether it is possible to identify diagnoses from home visits that are primarily used for coding assessments versus home visits where the primary purpose is treatment and, if so, how these differences can be identified,” Brooks-LaSure wrote.