UnitedHealth risks billions of dollars in Medicare payments as Feds target home visits

UnitedHealth (NYSE:UNH) risks losing billions of dollars in revenue if the government follows up on a recent report that accused the company of wrongfully collecting Medicare payments by using questionable home visits to seniors.

In its report, the Office of Inspector General faulted companies, including UnitedHealth (NYSE:UNH) and its rival Humana (HUM), for collecting as much as $7.5B in payments in 2023 by conducting annual Health Risk Assessments (HRA) without any follow-up.

UnitedHealth (NYSE:UNH) and Humana (HUM) are leading providers of Medicare Advantage, the private version of government-backed insurance.

Based on HRAs and other measures, the MA administrator, the Centers for Medicare & Medicaid Services (CMS), offers additional payments to health plans for serving enrollees with higher expected healthcare costs.

Previously, the CMS found that health insurers collected $12.7B in overpayments in 2023 by submitting dubious diagnoses that were not backed by enrollees’ medical records. The OIG’s report estimated the amount to be $7.5B.

“Diagnoses reported only on an HRA—conducted in any setting—buton no other service records raise questions about whether the diagnoses are valid and whether enrollees got needed care,” the report said.

HRAs conducted through home visits generated the highest portion of such payments, 46%, while these visits comprised only 13% of 2022 MA reviews.

The OIG pointed out that 20 MA firms accounted for 80% of overpayments, though they covered only 50% of members. The agency blamed UnitedHealth (NYSE:UNH) for leading the use of home visits to generate additional payments.

UnitedHealth (NYSE:UNH) disputed the claims. “A misleading, narrow, and incomplete view of risk adjustment data is being used to draw inaccurate conclusions about the value of in-home care for America’s most vulnerable seniors in Medicare Advantage,” The Wall Street Journal quoted a company spokesman as saying.

He noted that home visits conducted by highly-trained clinicians help “identify and drive needed follow-on care for the vast majority of the patients with whom we engage.”

However, according to the report, UNH generated ~$3.7B from HRAs and associated reviews, while Humana (HUM) took ~$1.7B. Other listed payors, Cigna (CI), added $237.0M, while Alignment Healthcare (ALHC) collected ~$60.0M.

The OIG recommended CMS impose restrictions on risk-adjusted payments linked only to home visits and conduct audits to validate the diagnoses made during the visits.