Since the Dec. 4 tragic killing of United Health CEO Brian Thompson, there has been a steady drumbeat of negative press surrounding United Health.
The most dramatic news came on Friday, when the Wall Street Journal reported that the Dept. of Justice (DOJ) launched a new civil fraud investigation into United Health’s billing practices in its Medicare Advantage Programs.
What is Medicare fraud, what are its penalties, and which agencies are responsible for enforcing these laws?
There are several Medicare fraud and abuse laws, including the following:
• False Claims Act
• Anti-Kickback Statute
• Social Security Act, which contains the exclusion statute and
Civil monetary penalties
• U.S. Criminal Code
The False Claims Act states that it is illegal to submit or cause to be submitted to Medicare claims that you know or should know are false. Each item or service billed to Medicare is a separate claim. Each claim can result in fines of three times the amount falsely charged plus $11,000. There are also criminal penalties for committing Medicare fraud.
The Anti-Kickback Statute is a criminal law that prevents the payment of remuneration to induce or reward the generation of business or patient referrals. Renumeration is considered anything of value and includes money, below-market rent, or gifts. An example is a hospital providing free office space to a physician in return for the physician bringing Medicare patients to the hospital.
The Office of Inspector General (OIG) is legally required to exclude entities and individuals convicted of Medicare or Medicaid fraud from all federal health care programs.
The following agencies enforce the Medicare fraud and abuse laws:
• The DOJ
• The Department of Health and Human Services (HHS)
• The Office of Inspector General of HHS
• The Centers for Medicare and Medicaid Services
The DOJ ultimately determines the presence of Medicare fraud and the appropriate penalty. We, therefore, have plenty of laws and agencies overseeing Medicare fraud and abuse.
Medicare Advantage is an alternative to traditional Medicare. It is offered by private insurance companies that have a contract with Medicare. The companies are paid a baseline amount per enrollee and additional money based on a risk score based on specific recorded diagnoses. The payments for sicker patients began in 2004. The Center for Medicare and Medicaid Services (CMS) pays and regulates Medicare Advantage plans.
CMS rule 422.504 regulates the contract provisions between CMS and Medicare Advantage Organizations (MAO), which are insurance companies.
Included in this rule are the following stipulations that the insurance companies must comply with:
Section (h)(1)
• Federal laws and regulations designed to prevent fraud, waste
and abuse
• Applicable provisions of Federal criminal law
• The False Claims Act
• The Anti-Kickback Statute
Section (l)(1) States that the CEO, CFO, or an individual delegated the authority to sign on behalf of these officers and who reports directly to them must certify that the information relied upon by CMS in determining payment (based on best knowledge, information, and belief) is accurate, complete and truthful.
This means that health insurance companies offering Medicare Advantage Plans must comply with all Medicare fraud and abuse laws, and the company’s top officers are responsible for the accuracy of the information used to get paid.
Health risk assessments generate diagnoses that determine risk-adjusted payments under the Medicare Advantage program. They allow the treating physician to identify areas of concern, coordinate care, and provide needed supplies or medicines.
Health risk assessments are completed in the following ways:
• In-home, usually by nurse practitioners
• Chart Review
• Telehealth
• Facility-based (usually physician offices)
United Health employs or is affiliated with 90,000 physicians, 10 percent of all physicians in the US. This can present a conflict of interest for physicians. Are they representing the best interests of the patient or United Health? Are they your physician if they receive a paycheck from United Health?
An article in the Wall Street Journal highlighted the techniques used by United Health to increase the risk scores of Medicare Advantage patients by their physicians.
The first technique was preparing a checklist of suggested diagnoses for Medicare Advantage patients to the physicians.
The diagnoses were often incorrect or irrelevant, but the company software mandated that the physician check a box for each diagnosis. The options were to accept, rule out, or defer each diagnosis. The system could lead to physicians’ erroneously confirming diagnoses, increasing United Health’s revenue.
Physicians are under intense pressure to see more patients, and the electronic health record impedes this. To close out the patient record, many boxes must be clicked; many times, these are done without careful evaluation to save time.
The article also describes how United Health-owned medical groups ranked physicians by their patients’ average risk scores. The highest risk scores were listed in green, and the lowest in red. This is a very public way of coercing physician behavior.
Analysis of contracts with independent physicians reveals that United Health links bonuses to risk scores and quality ratings, which include patient satisfaction. The combination of risk scores that are 50% above average and top-quality ratings could return $65 per month for each patient. This would provide a bonus of $78,000 annually if you had 100 UnitedHealth patients under your care. The linking of higher physician payments to increased risk scores that provide extra revenue for United Health may violate the Anti-Kickback Act and could be a possible area of investigation for the Department of Justice.
All the above techniques incentivize physicians to maximize patients’ risk scores, increasing the amount of money United Health collects from the federal government.
Dr. Emile Scott said this best: “The system is not primarily about taking care of the patient. It’s about how you get the money to flow.” Dr. Scott worked for a United Health-owned practice and left in 2016.
It is evident that United Health does not defer to physician judgment; instead, it actively pressures physicians to act in ways that optimize United Health’s profits. This is precisely why insurance companies should never own or coerce physicians.
There is a limit to how much United Health or any insurance company can control how physicians practice and what diagnoses they will enter into the record.
To compensate for that, insurance companies use mechanisms to bypass physicians and more directly control the diagnoses assigned to patients for risk scoring. These include chart reviews and in-home health risk assessments.
The Affordable Care Act specifies that a health risk assessment be part of an annual wellness visit.
The health risk assessment allows the treating physician or other health care professional to identify areas of concern, coordinate care, and provide needed supplies or medicines. Medicare Advantage insurance companies often use health risk assessments to add diagnoses to patients’ records, which results in higher payments.
Health risk assessments are completed in the following ways:
• In-home, usually by nurse practitioners
• Chart review
• Telehealth
• Facility based, most commonly a physician office
Medicare allows insurers to review a patient’s medical records and add diagnoses, even if the patient is never treated for the diagnosis or the physician disagrees. A cottage industry of medical coders and data analytics professionals will use AI and review the chart for any additional diagnoses.
A Wall Street Journal investigation based on Medicare data from 2019 to 2021 revealed that United Health used home health visits to document diagnoses, which led to higher payments under the Medicare Advantage program. The average payment was $2,735 per home health visit over the 2019-2021 period, and a revenue-producing diagnosis was documented on 60% of the visits. The average for all insurers was $1818 over the same period. The analysis revealed that home health visits by United Health’s HouseCalls division sent nurse practitioners to 2.7 million homes of Medicare Advantage patients in 2023.
During the home health visits, nurses asked questions about the patient’s medical history and medication use and performed a basic physical exam and screening tests as indicated. The information was then fed into a tablet that ran software called eHouseCalls. The software suggested diagnoses that the NP could make. Often, the suggested diagnosis was based on incomplete testing and evaluation.
Secondary hyperaldosteronism is one such diagnosis. It is a rare disorder that United Health diagnosed after a home visit 246,000 times, which resulted in payments of $450 million over three years. The diagnosis is usually made by testing the blood levels of two hormones, renin and aldosterone. However, the diagnosis of secondary hyperaldosteronism suggested by eHouseCalls is based on history and exams without any laboratory testing.
The Office of the Inspector General (OIG) released a report in October titled “Medicare Advantage: Questionable Use of Health Risk Assessments Continues to Drive Up Payment to Plans by Billions.”
The investigation found that diagnoses reported on patients’ health risk assessments and health risk assessment-linked chart reviews but not found in their medical records totaled $7.5 billion in 2023. This means that insurance companies were paid for the diagnoses. Still, there was no record of office visits, follow-up procedures or tests, treatments, medications, or supplies related to the diagnoses. The conclusion is that either the diagnoses were inaccurate and should not have been filed or accurate and the company was paid but failed to provide the necessary care. Either way, the insurance companies are making billions from these diagnoses and providing no care.
The insurance company, not the patient’s physician, usually conducts the in-home health risk assessments and linked chart reviews. Thus, diagnoses generated from these are less likely to correlate with the patient’s care.
One insurance company received about two-thirds of risk-adjusted payments from health risk assessments conducted via home visits and chart reviews. The insurance company only covered about 28% of the total enrollees.
The insurance company wasn’t named in the report, but “An OIG official confirmed to the Journal that the company was UnitedHealth Group.” The journal in the quote is the Wall Street Journal.
The diagnoses more commonly reported as a result of home visits in the OIG report were complicated ones that required lab work, specialist examination, or imaging. These include the following diagnoses:
• Secondary Hyperaldosteronism
• Type 2 diabetes with diabetic polyneuropathy, which is diabetes affecting multiple nerves
• Type 2 diabetes with diabetic cataract
The OIG report’s lead author, Jacqueline Reid, stated, “There are definitely conditions where you might wonder, Can they really, you know, identify that by a visit to someone’s home?”
The OIG develops recommendations for CMS and decides on a course of action. The OIG’s report is detailed, thorough, and very well done. The recommendations that the OIG developed for CMS include the following:
Additional restrictions on using diagnoses reported only on in-home or chart reviews linked to in-home health risk assessments could include excluding such diagnoses from risk-adjusted payments. Another option is to ensure that meaningful action was taken to connect the patient to care based on the diagnosis before payment is received.
If CMS allows the diagnoses generated from in-home and chart reviews to continue, then it should conduct audits to validate the diagnoses.
Determine if certain diagnoses drove payments from home visits and chart reviews that may be more susceptible to misuse among the insurance companies.
CMS disagreed with the first and second recommendations. However, it concurred with the third recommendation and will exclude or constrain diagnoses driving payments from home visits and chart reviews.
This is a disappointing response from CMS, as the OIG conducted a thorough investigation and made very reasonable recommendations. However, this isn’t unexpected, as CMS has a long history of bending the knee for the health insurance industry. On June 9, 2014, the Center for Public Integrity published an article titled “Health Insurers have their way with regulators.” This article describes the widespread use of upcoding or exaggerating how sick patients were. CMS sampled data from health plans and estimated that from 2008 to 2013, there were almost $70 billion in improper payments to insurance companies, usually from upcoding.
CMS shields the identities of health plans audited and the audit results. It works for taxpayers, and while auditing private companies that are part of a taxpayer-funded health program, it protects private companies, not taxpayers. In February 2012, CMS generously gave to the insurance industry. They announced they would forgive overpayments to Medicare Plans from 2008 to 2010. There was no IRS forgiveness of unpaid taxes during this period; corporations shouldn’t receive better treatment than taxpayers.
A whistleblower lawsuit against United Health has been ongoing since 2011. A former employee filed it, and the DOJ took it over in 2017. The lawsuit claims that United Health used chart reviews to generate $7.2 billion in additional Medicare payments based on risk scoring from 2009 to 2016. However, the chart reviews found $ 2.1 billion in unsupported diagnoses that United should have reported to CMS.
By 2013, CMS knew that insurance companies were hiring medical coding and data analytic companies to mine patient records for diagnoses that would command increased payments. Thus, CMS drafted a rule in January of 2014 requiring chart review to identify unsupported diagnoses and return any money paid for them.
CMS withdrew the rule in May 2014, and the reason wasn’t made public until recently. Depositions from the DOJ suit against United Health reveal that CMS withdrew the rule because of stiff insurance company resistance. At the time, the director of the CMS Medicare plan payment group, Cheri Rice, said direction from above was that the final rule could only include provisions with broad stakeholder support. In other words, we aren’t allowed to upset the industry we are supposed to regulate.
Marilyn Tavenner was in charge of CMS from May 2013 until February 2015. She left CMS within a year of the withdrawal of the rule regulating chart reviews and became president of America’s Health Insurance Plans, the lobbying organization for insurance companies. This highlights one of the significant issues with CMS: the revolving door between it and the insurance industry. Her replacement was Andy Slavitt, an executive vice president at Optum, a subsidiary of United Health.
The investigation against United Health for its Medicare billing practices is critical, as United Health is the largest insurer for Medicare Advantage patients. United Health is also very aggressive with upcoding patients via home visits and chart reviews, the two areas of concern highlighted by the OIG report.
Medicare Advantage is the most lucrative type of health insurance, as the federal government overpays insurance companies $83 billion compared with Traditional Medicare, according to the Medicare Payment Advisory Commission, a nonpartisan agency that provides information to Congress regarding Medicare.
My recommendations are as follows:
Eliminate the option of insurance companies assigning diagnoses via home health visits and chart reviews. Insurance companies should not be practicing medicine.
Diagnoses should be entered into the chart by the treating physician.
Diagnosis should be made following the standard of care and not by insurance industry criteria.
Any payments to insurance companies for risk-adjusted payments should only be paid after care for that diagnosis is provided. For example, instead of a nurse practitioner at a home visit diagnosing a patient with secondary hyperaldosteronism, the diagnosis would be paid after the patient saw an endocrinologist and the testing for renin and aldosterone were consistent with the diagnosis.
All CMS audits should be made public in real time, and every healthcare company should be identified.
CMS employees should face civil and criminal penalties if they are aware of fraud and fail to act.
CMS requires that the CEO, CFO, or their designee sign and verify all data that results in payment. Therefore, the C-suite executives of United Health and every insurance company should be held accountable if there is any fraud. This would include both personal fines and prison time if appropriate to the situation.
The Exclusion Statute legally requires the Office of Inspector General to exclude entities convicted of Medicare fraud from participation in all federal health care programs. If United Health is found guilty of Medicare fraud, it should also be excluded from these programs.
Insurance companies should not be allowed to own or offer incentive payments under federal health programs. These actions are conflicts of interest, and incentive payments may violate the Anti-Kickback Statute.
Insurance companies should not own home health agencies as this is a conflict of interest.
OptumServe is the technology subsidiary of United Health. CMS created the One PI system to help identify, deter, and prevent all fraud, waste, and abuse activities across the agency. This system is used for Medicare, and it is a conflict of interest that United Health is under investigation for Medicare fraud and is allowed to maintain the computer system that monitors it. A company that doesn’t participate in the Medicare program should maintain the server that monitors fraud, waste, and abuse in Medicare.
Federal agencies that regulate healthcare should not allow employees to work in the healthcare industry after leaving government employment.
Hopefully, the new leadership of the CMS and the DOJ will do the following:
• Perform a thorough investigation in a timely fashion
• Incorporate my recommendations
• Protect and maintain the integrity of Medicare for our
seniors
• End all fraudulent payments under Medicare Advantage
