Introduction

Today we are going to discuss United Healthcare and how they have requested “Extra Payments” from Medicare. The Wall Street Journal concluded a year long investigation and published “How Health Insurers Racked Up Billions in Extra Payments From Medicare Advantage” on January 2, 2025 With the details of the allegations. If you don’t have a subscription to WSJ, MSN has a free copy of the article here.

The Problem

The Wall Street Journal uncovered a scheme to defraud Medicare Advantage by tacking on diagnoses for patients with conditions that caused extra payments from the government. These patients were never treated for these conditions. From the Wall Street Journal

Medicare Advantage insurers diagnosed patients with conditions that triggered extra payments of $50 billion from 2019 to 2021, even though no doctor ever treated the diseases.

Under Medicare rules, the government pays insurers extra money to cover the costs of caring for patients who are diagnosed with certain conditions. Patients are typically diagnosed by the doctors and hospitals that treat them. But Medicare allows insurers to tack on additional diagnoses after reviewing medical charts and sending their own nurses to visit patients at home.

The Journal’s analysis of government Medicare data found that insurers often inaccurately added conditions that trigger high payments. For instance, more than 66,000 Medicare Advantage patients were diagnosed by their insurers with diabetic cataracts even though they had already had surgeries that cured the condition, making it anatomically impossible for them to have it. In other cases, the Journal found patients who were reported by their insurers to have HIV, the virus that causes AIDS, but didn’t receive any of the lifesaving treatments that doctors recommend for all patients with the condition.

While that sounds pretty cut and dried for literal fraud, it gets worse. When doctors couldn't find anything to diagnose, the payers sent nurses to the patient. Again, from the Wall Street Journal:

Insurers dispatched their own nurses to visit patients at home and diagnose them with conditions that their doctors hadn’t, triggering an average of $1,818 in extra annual payments during each visit from 2019 to 2021—$15 billion in total.

UnitedHealth generated far higher payments per visit, averaging $2,735—about three times the level of all other Medicare Advantage insurers. UnitedHealth covers about one-third of Medicare Advantage members.

To find extra diagnoses, nurses used tests that produced questionable results, including one for peripheral artery disease that the U.S. Food and Drug Administration hasn’t approved for use as a stand-alone diagnostic device. Nurses sent by insurance companies added about 700,000 cases of the condition, which involves narrowing blood vessels, triggering $1.8 billion in payments during the period the Journal studied.

Further, to add insult to injury, payers got paid for patients who were already getting treatment from another provider.

Medicare Advantage insurers collected billions of dollars a year in premiums to provide medical coverage to patients who used the Department of Veterans Affairs health system—and not Medicare—for some or all of their healthcare needs.

The insurers sought to recruit veterans with cash-like rebate payments that encourage them to sign up, the Journal found. Nearly 90% of plans focused on veterans offered the rebates.

Many veterans rely on the VA for some or all of their care, and they used Medicare services at far lower rates than typical members the Journal analysis found. Under a decades-old law, the VA can’t bill Medicare insurers.

About one in five members of Medicare Advantage plans that enroll lots of veterans didn’t use a single Medicare service in 2021 the Journal found. That compares with 3.4% of members of other Medicare Advantage plans. Insurers can profit when members have low costs.

Even worse, United Healthcare specifically provided doctors with checklists of diagnoses for them to complete. If a diagnosis wasn't checked, then the patient was diagnosed with the condition and Medicare got charged for it. From the article:

UnitedHealth provided doctors with checklists of possible diagnoses for their patients and paid bonuses for completing them.

When patients moved from traditional Medicare, where doctors aren’t encouraged to find additional diagnoses, to UnitedHealth Medicare Advantage plans and received care from the company’s doctors, they appeared to acquire previously undiagnosed maladies, according to the Journal’s analysis of Medicare data between 2019 and 2022. Under the system Medicare uses to calculate payments, those patients got 55% sicker, on paper, in their first year in UnitedHealth plans, an increase equivalent to every patient getting newly diagnosed with HIV and breast cancer, the analysis showed.

A spokesman for UnitedHealth said in a written statement that the company’s practices lead to “more accurate diagnoses, greater availability of care and better health outcomes and prevention, including less hospitalization, more cancer screenings and better chronic disease management.” After the article was published, UnitedHealth released another statement calling the Journal’s reporting flawed, without specifying any inaccuracies.

Finally, there is evidence that expensive treatments like nursing home care left the program at high rates, suggesting that payers were probably denying them coverage. From the article:

Medicare Advantage insurers netted $3.5 billion in savings from their sickest patients dropping out to return to traditional Medicare in the last year of life from 2016 to 2022, the Journal found.

The figure is a sign, experts said, that patients may not be getting the care they need through the private insurers. When patients leave Medicare Advantage, taxpayers pick up the full bill for their treatments.

The Journal’s analysis showed end-of-life patients fleeing Medicare Advantage plans were seeking one of the most commonly denied services—nursing-home care—at a rate five times higher than peers who were continuously enrolled in traditional Medicare.

Insurers said most members are happy with their Medicare Advantage plans and may switch to traditional Medicare for other reasons. After the Journal’s report, an independent research group published its own analysis showing patients with a range of serious illnesses left Medicare Advantage more often than healthy patients.

The Solution

The solution is to put health insurance companies out of business. You don’t want bankers running anything; they crash the economy every ten years on average, and it doesn’t have to be that way. Yes, bankers are running insurance companies. The Commonwealth Fund identified several problems in their paper “U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes” That basically boiled down two problems:

Health insurance is too expensive
Patient education is largely ignored

If we can address these two problems, we can fix the US healthcare system.

The Concept

Health insurance companies have two inputs: a patient and a procedure, and one output: a check to the practice for the procedure performed. That is it. If we automate the process between the input and the output, then we have eliminated everything the insurance company does. The only other thing we need to add would be some way to educate and incentivize the patient on how to live a healthy lifestyle. That would result in fewer claims, causing reduced rates for everyone.

The Execution

We at Sentia have designed and developed a solution that completely automates health insurance. We provide the Electronic Medical Records (EMR) system to the practice, and when they code a patient encounter, we pull out the procedures performed and pay for them in real time. There is no adjudication, no denials, no medical coding, no big buildings, no people and most importantly, little to no cost once the system is built. For this service we charge $10 per month plus the actual cost of the risk. Remember that your health insurance company only returns 53% of your premiums as benefits. We can return the 47% they waste, on average to the patient, in lieu of the previously stated $10 per month. There are other efficiencies we will explain, and a way to manage chronic, behavior-based disease.

Patient Education

Also remember that treatment for chronic, behavior based disease consumes 84%, or $3.7 trillion, of the $4.4 trillion spent on healthcare each year in the US. The average of avoidable deaths per 100,000 in OECD countries is 225. In the US it is 335, or about 33% higher. If we could bring the US average down to the OECD average, we would save about $1.2 trillion. That is a further reduction in costs of about a quarter of the total.

How do we do this? We offer financial incentives for people who live a healthier lifestyle as measured by our built-in health and wellness system. This system takes into account measurements taken at the primary care physician’s practice, like height, weight and blood pressure, plus things screened for in blood work. Additionally, there is a mental health screening right in the wellness package. This system looks at all these factors and then prescribes patient education based on the results. At Sentia, this is part of the system. We can tell when the patient opened the patient education and how long they spent reading it, and offer a small discount for simply doing so. A larger discount is offered for reading and following the education, as evidenced by better results in the patient screening.

The Finances

Let’s look at big round numbers. Let’s say we can save the patient about 40% on their health insurance up front. Let’s say that we save the people of the US another 25% by being educated about healthy living and getting to the average OECD deaths per 100,000. We know that eliminating medical coding, providing a free EMR to the practice and putting compliance and efficacy reporting into that system will save each and every practitioner an additional $77,000 per year that they currently spend. That however is only about 2% of the total, so we’ll just ignore it. If we total all that up, we see more than 60% savings. That means that we would have not only the best healthcare on the planet but also the cheapest.

Conclusion

We have shown a way to save about 60% from the cost of health insurance and have addressed both of The Commonwealth Fund’s two conclusions about health insurance in the US: cost and education. We have all of this written and deployed in a prototype application. The only thing we really need to get this all started is to clean up that application and turn it into an enterprise application with logging, administration and redundancies in hardware. We will need funding, probably about $100 million over the first two years, like other startup health insurance companies. For comparison, United Healthcare had revenue of $371.6 billion and net earnings of $22.3 billion. With about 60% savings we should service and retain 90% or more of the 300 million insured people in the US. That gives us a revenue of $36 billion, however, everything in our system is automated so that is a $32.4 billion profit at a 90% profit margin.

This figure shows that this is a viable business proposition.

We have shown a way to make patients healthier by educating them on the consequences of their behavior, and a way to capitalize on that to the sum of $1.2 trillion or about 25%. If we add that to the process automation savings of our solution, we are in the ballpark of more than 60% savings in total. We already have the best doctors and the best equipment; we just need to implement the above detailed framework to give them all the tools necessary for success.

We have this system in prototype now, fully functioning.

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We have built a comprehensive health information system to keep the patient healthy and on the right track with the ability to incentivize healthy living. Implementing this system should be fairly simple and will completely revolutionize the way healthcare is paid for, saving countless lives. We have shown a way to use this system to make the best healthcare system in the world also the most efficacious and the most affordable, and a way to move toward value-based care.

UHC Caught Defrauding Medicare

1/13/2025 12:00 AM