Medicare Advantage and the Saga of Scrutiny

The saga of increased scrutiny of Medicare Advantage plans continues to unfold.

UnitedHealthcare’s Suspension
CMS announced a suspension of one year for the UnitedHealthcare H5322 contract for not reaching the mandatory 85percent medical loss ratio (MLR). Plans must achieve that magic medical loss ratio on an annual basis. For those unfamiliar with the MLR, a designated amount of each premium dollar must go to either consumers’ medical claims or health improvement. Payers can easily go over this threshold, putting more premium dollars toward administration and health plan upkeep. Should this event happen, insurers must pay back the dollars to their consumers as a rebate; herein lies the challenge

UHC was required to reach an 85percent MLR for their Care Improvement Plus’s contract, with $0.85 of every premium dollar going toward beneficiaries’ health needs. Yet, over the last three years, UHC did not meet this requirement:

• 71.3 percent for calendar year 2016,
• 83.9 percent for CY 2017, and
• 84.1 percent for CY 2018

As UnitedHealthcare’s Medicare contract H5322 through Care Improvement Plus failed to meet the MLR requirement for the third year in a row and, CMS issued a plan suspension for the year.

UHC is far from alone in facing a CMS reprimand, though they so far, the only plan that failed to meet the MLR this year. CMS has placed 13 sanctions so far this year, including the Care Improvement Plus South Central Insurance Company.

Whistleblower Lawsuits
Group Health Insurance (GHI) has the reputation of being one of the oldest and most respected nonprofit health insurance plans in the US. That reputation is now at issue. A whistleblower accused GHI of defrauding Medicare out of millions of dollars. The federal whistleblower case involves a former medical billing manager at GHI, who alleges the company sought to reverse financial losses in 2010 by claiming patients were sicker than they were, or by billing for medical conditions patients didn’t have. GHI then allegedly, retroactively, collected approximately $8 million from Medicare for 2010 services, per the suit.

Some eighteen cases have so far accused Medicare Advantage plans of engaging in potentially fraudulent actions, by exaggerating how sick their patients were. Kaiser pushed this agenda last month when they initiated a lawsuit against CMS to release dozens of audits that the agency says reveal hundreds of millions of dollars in overcharges by the Medicare Advantage health plans. The lawsuit was filed in U.S. District Court in San Francisco under the Freedom of Information Act, seeking copies of 90 government audits of Medicare Advantage health plans conducted for 2011, 2012 and 2013 that were never made public. CMS officials anticipated collecting some $650 million in overpayments from the audits.

The names of the several dozen health plans under scrutiny were disclosed though no other details. More recent announcements have named other insurers being sued, including Blue Cross of Northeastern New York out of Albany and HealthNow New York (Blue Cross Blue Shield of Western New York), Buffalo’s largest health plan. The latter is accused of overcharging school districts and the state and federal government by over $85 million.

Industry experts have identified these whistleblower cases as a tool for getting back overpayments. A majority of the cases remain pending in courts, with millions so far recovered. The question beckons: Have these Medicare Advantage plans rushed ahead too quickly with promising more than they can deliver?

The real response to the social determinants will take strategic and longstanding financial commitment by all, especially insurers. Follow this ongoing story, and the State of the Social Determinants, weekly on Monitor Monday.