DOJ joins Medicare Advantage fraud lawsuit against UnitedHealth

By Shelby Livingston  | February 16, 2017

The U.S. Justice Department has joined a whistleblower lawsuit claiming that UnitedHealth Group and affiliated health plans have been gaming the Medicare program and fraudulently collecting millions of dollars by claiming patients were sicker than they really were.

The lawsuit, initially brought in 2011 and unsealed Thursday after a five year-long investigation by the Justice Department, alleges that Minnetonka, Minn.-based UnitedHealth has inflated its plan members' risk scores since at least 2006 in order to boost payments under Medicare Advantage's risk adjustment program.

UnitedHealth, the nation's largest Medicare Advantage insurer, allegedly collected payments from false claims that it treated patients for conditions they didn't have, for more severe conditions than they had, conditions that had already been treated, or diagnoses that didn't meet the requirements for risk adjustment, according to the complaint.

The lawsuit claims that in 2010, UnitedHealth planned to increase operating income by $100 million through "Project 7," which was the company's codeword for initiatives to increase risk adjustment payments.

“We reject these more than five-year-old claims and will contest them vigorously,” UnitedHealth spokesman Matthew Burns said in a statement Thursday. “We are honored to serve millions of seniors through Medicare Advantage, proud of the access to quality health care we provided, and confident we complied with the program rules.”

Payment rates in Medicare Advantage are based on regional trends and utilization in traditional fee-for-service Medicare as well as adjustments to plan members' risk scores, among other variables. Under the Medicare Advantage program, the government pays private health plans monthly amounts for every member they cover, and those taxpayer-funded payments are adjusted based on how sick someone is.

Members with more chronic conditions have higher risk scores, and plans that cover them receive higher payments. These risk scores were created to incentivize plans to cover all seniors regardless of their health status, but there have been several whistleblower lawsuits in recent years that allege foul play by health plans to inflate the scores and collect more funds.

On average, the CMS pays a Medicare Advantage plan close to $3,000 per year, per condition that a member has that requires a risk adjustment payment, according to the complaint.

The lawsuit makes similar allegations against Health Net, Arcadian Management Services, Tufts Associated Health Plans, Aetna, Blue Cross and Blue Shield plans in Florida and Michigan, Emblem Health, Humana, Wellcare Health Plans and others.

 

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4 Broken Obamacare Promises Town Hall Protesters Should Remember

February 16, 2017 By D

While the House and Senate plan to repeal and replace Obamacare, members of Congress are hosting town hall meetings with their constituents and have been greeted by hostile crowds.

These folks seem to have amnesia about Obamacare’s glaring failures.

Here’s a quick refresher on Obamacare’s top four broken promises.

1. Costs are exploding.

President Barack Obama promised that his reform proposal would cut typical family costs by $2,500 annually. That, of course, never materialized.

The typical family today pays about 35 percent of their income for health care.

The small group and individual insurance markets were hit hard by big premium increases. An eHealth report concluded that from 2013 to 2017, the average individual market premium increases were 99 percent for individuals and a jaw-dropping 140 percent for families.

Costs have also increased for those with employer-sponsored insurance, according to the Kaiser Family Foundation, from 2010 to 2016, average family premiums for employer-sponsored plans nearly increased 32 percent.

Higher premiums are not the only shock. Out-of-pocket costs in the Obamacare exchanges, particularly deductibles, have been stunning. HealthPocket analyzed that for the lowest tier bronze plans in 2017, the average deductible for an individual is $6,092 and $12,383 for a family.

2. Competition and choice are declining.

Obama told America his proposal would increase competition in the health insurance markets but that hasn’t happened either.

On Tuesday, news broke that Humana will be leaving the Obamacare exchange markets next year. This was just the latest in a growing list of insurers who are jumping ship from this massive public policy failure.

Town hall audiences should take a good look at county-level data. A new Heritage Foundation analysis found that Obamacare’s exchanges, in their fourth year of operation, offer Americans little health insurer choice.

The downward slide in competition means that in 2017, consumers in 70 percent of U.S. counties are left with just one or two insurer options on the exchanges. The 70 percent figure is way up from 36 percent in 2016.

3. Forget about keeping your plan.

Perhaps the most famous health care promise of all, Obama’s promise: “If you like your health care plan, you’ll be able to keep your health care plan.” In fact, there were 37 instances where Obama or a high-ranking administration official repeated that infamous promise to keep you plan and your doctor.

Rarely has there been such a disconnect between rhetoric and reality. In 2014, the first year that Obamacare was fully implemented, the Associated Press reported that there were at least 4.7 million canceled policies across 30 states. The law’s insurance rules and mandates forced many insurers to cancel plans that people liked and wanted.

Sadly, the disruption only continued from there. For example, hundreds of thousands of people signed up for plans offered by insurers under Obamacare’s co-op program.

But 18 out of 23 of these federally-funded insurers have already collapsed, meaning taxpayers are highly unlikely to be repaid the more than $1.9 billion in loans they received—not to mention the thousands of co-op enrollees that lost their health care plans, some in the middle of the year.

Not exactly a proud moment in public policy.

4. No, you can’t necessarily keep your doctor.

Obama promised patients that they would be able to keep their doctors. For many patients, that also turned out to be untrue.

Obamacare’s rising costs, and its limited flexibility in federally fixed benefit designs, resulted in plans resorting to narrow provider networks. Narrow networks limit access to doctors and other medical professionals as a way to contain costs.

Enough is enough. For seven years, Obamacare has proved to be one giant bundle of broken promises and policy failures. Congress needs to get serious—quickly—and repeal Obamacare.

This is a crucial first step in moving America toward the patient-centered health care system our country deserves.

Commentary by The Heritage Foundation’s Jean Morrow.  Originally published at The Daily Signal.

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U.S. Drug Spending Increased 3.8% in 2016

Express Scripts recently released their annual report on prescription drug spending. Here are some key findings from the report:

•	U.S. drug spending increased 3.8% in 2016, 27% less than in 2015.
•	Drug spending decreased for one third of plans in 2016.
•	The average out-of-pocket cost for a 30-day prescription was $11.34 in 2016.
•	Member OOP cost share was 14.6% of the total costs per adjusted Rx in 2016.
•	Average drug unit costs rose 2.5% in 2016, 22% less than in 2015.
•	Specialty drug costs rose 6.2% in 2016, down from the 11.0% increase in 2015.

Source: Express Scripts, February 2017

26% of Californians Were Covered By Medicaid/CHIP in 2015

Kaiser Family Foundation recently updated state fact sheets on Medicaid spending. Here are some key findings from the report on Medicaid in California:

•	In FY 2015, Medicaid spending in CA was $85.4 billion.
•	26% of people in CA were covered by Medicaid/CHIP in 2015.
•	4 in 5 Medicaid enrollees in CA are in families with a worker.
•	34% of Medicaid spending in CA is for Medicare beneficiaries.
•	One-fifth of state general fund spending in CA is for Medicaid.
•	58% of all federal funds received by CA is for Medicaid.

Source: Kaiser Family Foundation, January2017

1 in 5 Have Received Virtual Health Care

Accenture recently released a survey on consumer interest in telemedicine. Here are some key findings from the report:

•	78% of consumers surveyed were interested in receiving care virtually.
•	1 in 5 survey respondents have ever received virtual health care.
•	77% would like to track indicators like blood pressure with technology.
•	3 in 4 respondents wanted to use telemedicine for follow-up appointments.
•	44% would be more likely to try virtual care if their physician recommended it.
•	When asked why they turn to virtual care, 37% attributed it to convenience.

Source: Accenture, February 9, 2017

80 Million Adults Went Without Care in 2012 Due To Cost

The Commonwealth Fund recently released an analysis of the health insurance market before and after the ACA. Here are some key findings from the report:

•	In 2012, 80 million adults went without care or medication because of the cost.
•	63 million in 2016 went without healthcare or medication because of the cost.
•	43% buying plans on their own in 2010 said it was difficult or impossible.
•	1 in 4 adults in 2016 said it was difficult or impossible to find a plan.
•	In 2012, 29% did not go to a doctor when they were sick because of the cost.
•	1 in 5 didn't go to a doctor when they were sick due to cost in 2016.

Source: Commonwealth Fund, February 1, 2017

WellCare profit soars on rising Medicaid enrollment

By Shelby Livingston  | February 7, 2017

 

WellCare recorded a giant increase in profit in the fourth quarter of 2016, bolstered by membership growth in its Medicaid business and reduced Medicare Advantage costs.

The Tampa, Fla.-based insurer recorded net income in the quarter ending Dec. 31 of $44.9 million, up 245.4% from the same quarter a year ago. For the full year, profit more than doubled to $242.1 million compared with 2015.

WellCare deals mostly in the Medicaid space and after a few years of stagnant growth, it has been growing its membership rapidly. It recently signed new Medicaid contracts in Nebraska and Georgia, bringing in new members. It also closed acquisitions of Care1st Arizona, and subsidiary of Care 1st Health Plan, and some assets of Advicare, a Medicaid managed-care company in South Carolina. Those two deals brought 117,000 new Medicaid members to WellCare.

WellCare's total Medicaid membership was about 2.5 million at the end of 2016, up 6.5% over 2015.

Meanwhile, Medicare Advantage membership dipped by 9,000 members to 345,000. But Medicaid has recently made a play to grow its footprint in the Advantage market, which has become increasingly attractive to insurers. Because the baby boomer generation is aging into Medicare at rapid pace, privatized Advantage plans have seen tremendous growth. That space is also set to expand further under the new federal administration, which supports pushing more Medicare members toward private plans.

Medicare Advantage currently represents about 27% of WellCare's annual revenue. But WellCare's $800 million deal to acquire Universal American Corp., announced in November, will add to that significantly. The deal will also help boost WellCare's Advantage star ratings, which have been low. About 70% of Universal American's 114,000 Medicare Advantage members are in plans with at least four stars.

Across Medicaid, Advantage and Medicare Part D prescription drug plans, WellCare has about 3.9 million members. It doesn't sell plans on the Affordable Care Act's exchanges.

Despite higher membership and premium revenue in Medicaid, WellCare's revenue for the fourth quarter was $3.5 billion, virtually flat from the same time last year. For the full year, revenue was $14.2 billion, up 2.5% over 2015.

Wellcare's medical benefits ratio, which shows how much of every collected premium dollar was spent on medical care and quality, was 85.3% in the fourth quarter, compared with 85.9% at the same time last year. For the full year, the MBR was 85.0%, down from 86.3% in 2015.

 

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