STAT exposes intense pressure for coding intensity at UnitedHealth

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Swell those Wellness Visit codes

It is beyond reasonable doubt that the federal government’s payments to Medicare Advantage plans are grossly inflated by the plans’ gaming of the program’s risk adjustment system, designed to deter plans from cherry-picking health enrollees. The risk adjustment program pays plans more for enrollees with higher “risk scores,” calculated on the basis of enrollees’ diagnosed medical conditions. Plans have various means of inflating enrollees’ risk scores — most notoriously, home risk assessments and chart reviews — a retroactive combing of the enrollee’s medical record to add new diagnoses.

The upcoding has been so egregious for so long that CMS’s is required by statute to cut the plans’ risk scores across the board by 5.9%. It’s not enough. In its March 2024 report to Congress, the Medicare Payment Advisory Commission (MedPAC) estimated that in 2022 MA risk scores were about 18% higher than scores for similar FFS beneficiaries due to higher “coding intensity” — the polite term for inflated risk scores. MedPAC forecast that in 2024, the coding intensity gap would increase to 20%. For the 2024 report, MedPAC adapted the methodology (see Ch. 13) of former CMS official Richard Kronick, who estimated in 2021 that risk adjustment overpayments would total $600 billion from 2023 to 2031 if not adjusted.

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For many years, MedPAC has recommended cutting MA plans’ risk adjustment payments by various means, the most straightforward being to increase the 5.9% across-the-board haircut to plans’ risk scores — a minimum imposed years ago by Congress. But cutting payments to Medicare Advantage plans, which now cover slightly more than half of Medicare enrollees, is politically difficult. This year, CMS cut back for the second year running on another source of overpayment — payment bonuses based on quality ratings, which had been boosted by a pandemic measure — resulting in some plans paring extra benefits and others discontinuing service in some regions. Republicans are certain to demagogue these reductions as Medicare Open Enrollment kicks off.

Compelling statistical evidence that coding intensity is steadily increasing MA overpayment has been manifest for years and hasn’t spurred much corrective action. A STAT* exposé this week of pressure exerted on physicians to increase diagnoses (“upcode”) by UnitedHealth Group, the largest MA insurer, could provide more impetus for change than a bevy of quality statistical studies, as it evidence of intentional, incentivized upcoding. As UnitedHealth also owns physician practices employing 10% of U.S. physicians, it’s in a particularly strong position to pressure doctors to upcode — a win-win for the company on both the provider and insurer side.

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STAT obtained emails from UnitedHealth executives to physicians in one UHC-owned practice exhorting them to diagnose chronic conditions:

the “#1 PRIORITY” became documenting older patients’ chronic illnesses to generate more revenue from the federal government, the emails show.

UnitedHealth shared with doctors in the practice a dashboard comparing the percentage of chronic diseases they found among their Medicare Advantage patients to other practices within the company. Those who completed the most appointments with older patients got a “SHOUT OUT!!” in the messages and were eligible for up to $10,000 in bonuses. “We can do this!!” another email said, encouraging doctors who were falling behind.

One focus of the documents obtained by STAT was the Medicare annual wellness visit, a free preventive service that, like home-based health risk assessments, can be used as an opportunity to pile on diagnoses:

One document ranked clinicians based on how many annual wellness visits they had completed with Medicare Advantage patients, and cheered those in the lead. “TOP 10 IN AWVs TOTAL!! SHOUT OUT!!,” the email blared, listing the doctors with the most visits. The message also listed bonuses for conducting more visits and explained the weekend clinics were a “win” for patients and providers because they helped increase coding of chronic conditions such as peripheral artery disease, or PAD, a narrowing of the arteries that bring blood to the arms and legs…

the documents show that UnitedHealth’s doctors diagnosed PAD in 47% of their Medicare Advantage patients — three to four times the estimated prevalence of the condition in older Americans. Each diagnosis generates about $3,000 a year in extra payments from Medicare [the STAT reporters have a prior article about UnitedHealth goosing PAD screening].

In 2023, CMS proposed and then passed in somewhat watered-down form adjustments to the risk adjustment program designed to curb “coding intensity” by removing some 75 diagnosis codes “where there is wid[e] variation in diagnosing and coding” — i.e., more opportunity for upcoding. Richard Kronick, perhaps the most trenchant critic of the MA risk adjustment program deemed the adjustments “baby steps,” though he told me, ““I am delighted that CMS has its nose in the tent.” My May 2023 conversation with Kronick delves into the history of MA risk adjustment, the effects, and various proposed solutions, including adjusting the annual haircut to reflect the full extent of coding intensity as calculated by his methodology, which MedPAC subsequently adopted, albeit with adjustments enabled by their unique access to “complete enrollment, demographic, and risk-score data (beneficiary-level risk-score data are available to the Commission but not generally available to researchers) for MA and FFS beneficiaries with both Part A and Part B.”**

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* The story is by Stat News reporters Tara Bannow, Bob Herman, Casey Ross, and Lizzy Lawrence. Casey and Herman are recent Loeb Award winners (and Pulitzer finalists) for a prior exposé of UnitedHealth subsidiary NaviHealth’s use of algorithms to deny post-acute care to patients in MA plans. Increase diagnoses, reduce expensive treatments: that’s MA’s winning formula.

** Limiting the risk comparison on the FFS Medicare side to enrollees who are enrolled in Medicare Parts A and B (omitting those enrolled in only one of the two) is important and reduces the coding intensity estimate significantly, because enrollees in Part A alone in particular tend to be healthier than the vast majority who enroll in both parts (many Part A-only enrollees are still employed). See this post for a look at two views of the effects of excluding single-part Medicare enrollees from the risk calculation.

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CMS puts ACA agents and agencies on notice: Immediate suspension if fraud is suspected

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Scout's honor won't cut it

Early this month, CMS released its annual proposal to update various rules governing the ACA marketplace, the Notice of Benefit and Payment Priorities (NBPP) for 2026. In one section, CMS proposes to clarify and perhaps expand upon its ability to swiftly suspend health insurance agents, agencies, and web-brokers (commercial enrollment platforms) suspected of fraud.

The proposed rule clarifies the conditions under which CMS will do what it is already doing under existing authority: Seek out and immediately suspend individuals* and entities whose enrollment records suggest a pattern of unauthorized enrollments and plan-switching and/or falsified income or eligibility information. Systemic failure to protect clients’ personally identifiable information is also grounds for immediate suspension.

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In clarifying its authority and intent to act swiftly to shut down agent fraud, CMS acknowledges that such fraud has escalated in the past year:

Since the start of PY 2024 Open Enrollment, we have seen an increase in complaints from enrollees, applicants, and other individuals and entities to the Agent/Broker Help Desk regarding enrollments submitted without enrollee or applicant consent, enrollee or applicant eligibility applications submitted with incorrect information and without enrollee or applicant review or confirmation of the eligibility application information, and changes to enrollee or applicant eligibility applications made without enrollee or applicant consent.

The patterns of fraudulent behavior CMS states it will seek out closely mirror the allegations in the putative class action lawsuit filed (and amended here) against agencies TrueCoverage and Enhance Health and TrueCoverage’s captive web-brokers, BenefitAlign and Inshura, which CMS suspended this past August. (Inshura is simply TrueCoverage’s rebranding of the Enhanced Direct Enrollment platform BenefitAlign.) Indeed, the allegations of fraud patterns in the proposed rule read in part rather like an answer to the suit BenefitAlign filed to force CMS to lift its suspension (CMS’s fourth suspension of TrueCoverage, Inshura and/or BenefitAlign since 2018). Among the suit allegations echoed in the proposed rule changes:

Monitoring web-brokers (EDE platforms)

Past investigations using system monitoring data have borne results that show a connection between potentially noncompliant, fraudulent, or abusive behavior and the trends we monitor. For example, we monitor the number of unsuccessful person searches on approved Classic DE and EDE partner sites because, in our experience, there is often a correlation between a high volume of unsuccessful person searches and noncompliant, fraudulent, or abusive behavior. The person search feature is intended to help agents, brokers, and web-brokers find consumer applications to prevent duplicate enrollments, but in our experience, bad actors use this feature to find applications and make plan changes or NPN changes without consumer knowledge or consent, negatively impacting the consumer and compliant agents, brokers, and web-brokers.

(The recently-suspended BenefitAlign alleges in its suit that it processed 1.6 million enrollment applications in Open Enrollment for PY 2024.)

Monitoring agencies

Discovering agency-wide resources, such as company practices or directives, training manuals, or marketing material that suggests agency endorsement of or involvement in misconduct or noncompliant behavior or activities is another source of information we would use to determine whether to engage in a compliance review or take an enforcement action…

we have seen agency documentation instructing agents and brokers who work at the agency to fabricate enrollee or applicant incomes on eligibility applications submitted to the FFEs or SBE–FPs to ensure the enrollee or applicant has a zero-dollar policy….

Additionally, as part of these investigations and actions, we have reviewed agency procedures and directives instructing agents and brokers who work at the agency to not speak with the enrollee or applicant prior to enrolling them in a plan.

Monitoring agents

A non-exhaustive list of agent or broker data we monitor to identify behaviors or activities that may be indicative of misconduct or noncompliance with applicable HHS Exchange standards or requirements includes: (1) the number of Exchange transactions submitted to the FFEs or SBE–FPs to change enrollee or applicant eligibility application information or plan selections, (2) the volume of person search activities, (3) the number of submitted eligibility applications with missing Social Security Numbers (SSNs), (4) the number of enrollments submitted within a specified timeframe, and (5) the volume of submitted eligibility applications with NPN changes. We also review and consider complaints from enrollees, applicants, and other individuals or entities concerning agent and broker activities.

In elaborating its intent to respond to suspicious activity with immediate suspensions, CMS stresses that it already has the authority to do this. Part of the proposed rule is devoted to affirming CMS’s intent to focus not just on individual agents but also on agencies that employ many agents and exhibit a pattern of encouraging or mandating noncompliant behavior. CMS notes that some 640,000 enrollments record the National Producer Number (NPN) of an agency, rather than an individual agent. In cases where agency-level misconduct is suspected, CMS affirms its intent to direct enforcement action “at the lead agent(s) and any other agent, broker, or web-broker who is discovered to be involved in the misconduct or noncompliant activity.”

While CMS points toward a significant number of enrollments that show an agency’s NPN rather than an individual’s, agents who have had their clients poached complain that when rogue individual agents are identified, there is often nothing to tie them to an agency that may be training and directing them in bad practice. Hence, perhaps, CMS’s emphasis on analyzing EDE data (hello, BenefitAlign) and getting hold of actual agency training materials as well as on including applications with agency NPNs in its analysis.

With regard to imposing immediate suspensions of agents, agencies and web-brokers suspected of fraud or noncompliance, CMS stresses that it already has that authority. Its only proposed change to the existing provision granting that authority, CFR 45 § 155.220 (k)(3), is the addition italicized below:

HHS may immediately suspend the agent's or broker's ability to transact information with the Exchange if HHS discovers circumstances that pose unacceptable risk to the accuracy of the Exchange's eligibility determinations, Exchange operations, applicants, or enrollees, or Exchange information technology systems, including but not limited to risk related to noncompliance with the standards of conduct under paragraph (j)(2)(i), (ii), or (iii) of this section and the privacy and security standards under § 155.260, until the circumstances of the incident, breach, or noncompliance are remedied or sufficiently mitigated to HHS' satisfaction.  

The first part of the federal code alluded to, paragraph (j)(2)(i), (ii), or (iii) of CFR 45 §155.220, lays out the conditions generally violated by the agent fraud or sloppy practice that’s come into focus recently. These include requirements that the agent provide both the client and the marketplace with accurate information; document that the client has taken positive action to affirm that the information provided to the marketplace is accurate; provide contact information that verifiably belongs to the client; provide an income estimate calculated by the client; and document that the client has taken action to confirm consent for the agent to assist with the application.

As much of the fraud of the past year-plus was at least initially enabled by vague rules concerning the obtaining of client consent, the NBPP also proposes modifying a Model Consent Form created in 2023 as part of the 2024 NBPP. The update would “include a section for documentation of consumer review and confirmation of the accuracy of their Exchange eligibility application information.” Startlingly, CMS confesses, “Until we finalized new requirements related to consumer consent in the 2024 Payment Notice, there was no mandate to document the receipt of consent of the consumer or their authorized representative, or to maintain such documentation.” That was the loophole that the unauthorized plan-switching/unauthorized enrollment gravy train drove through. While the requirement was in place for Plan Year 2024, enforcement lagged behind.

The second section of CFR 45 alluded to above, §155.260, lays out the exchange’s responsibility to protect applicants’ personally identifiable information (PII) and the responsibility of non-exchange entities that gain access to PII to maintain the security of that information. CMS cited failure to protect PII (by sharing it with overseas subsidiaries) in suspending the EDE BenefitAlign.

CMS more or less explicitly states that the purpose of the proposed added language is to send a message:

Though we believe our current authority in § 155.220(k)(3) allows HHS to implement system suspensions broadly based on circumstances that pose unacceptable risk to Exchange operations or Exchange information technology systems, in light of the increasing complaints about unauthorized enrollments, we propose amendments to § 155.220(k)(3) to increase transparency concerning the reach and application of system suspensions and more accurately capture in regulation when HHS may invoke this authority. These proposed amendments would allow HHS to immediately respond to discovered risks to the accuracy of Exchange eligibility determinations, Exchange operations, applicants, or enrollees, or Exchange information technology systems. They would also provide agents and brokers with an increased understanding of our approach to implement system suspensions. The proposed amendments would also better encapsulate the original intent of the § 155.220(k)(3) suspension authority, which included protecting against unacceptable risk to consumer Exchange data.

Agents and agencies are thereby placed on notice: ‘We will shut you down if you can’t document that your clients have attested to the accuracy of information provided on the application and confirmed their permission for you to act on their behalf.’

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* Suspension under the provision in question, CFR 45 §155.220 (k)(3), does not terminate an agent’s registration with the marketplace, and agents can submit evidence that the suspension is unwarranted, or that the flagged conduct has been remedied or mitigated to HHS’ satisfaction. Agents suspended under this provision can continue to assist clients with enrollment, either by phone or “side-by-side” on Healthcare.gov, but not independently on an EDE platform. Suspension under other provisions, §155.220 (f) or (g), in contrast, suspend or terminate the agent’s exchange agreement.

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Photo by Bryce Carithers 

VanceCare without Legislation

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Which risk pool will you land in?

In a recent post, I argued that JD Vance’s rendition of Trump’s “concept of a plan” for healthcare was mainly a sketch of how a second Trump administration would “build on” (tear down) the ACA marketplace administratively, without repeal/replace legislation.

In brief, that would entail 1) rebuilding Trump 1.0’s alternative market of medically underwritten, ACA-noncompliant plans (so-called Short-Term Limited Duration, or STLD, plans), and 2) prompting states to implement measures like the waiver concepts put forward by Trump’s former CMS administrator, Seema Verma. These “concepts” included 1) replacing ACA premium subsidies with a lump-sum health savings account that could be used to pay premiums for any plan; 2) inviting states to restructure the federal premium subsidy as they wished; 3) allowing states to grant premium subsidies for ACA-noncompliant plans; and 4) creating state high risk pools. Options 1 and 3 could effectively convert the ACA-compliant marketplace as we know it into a high risk pool of sorts, and in combination with option 4, could create the multiple stratified risk pools that Vance described in followup comments.

Vance’s comments could also be read as an outline of repeal/replace legislation along the lines of the failed repeal/replace bills of 2017, which a Republican Congress would probably push through under a more authoritarian Trump 2.0 and a more MAGA Republican caucus than that of 2017-18. (In that case, Vance, the MAGA convert, would have to get on board with the massive Medicaid cuts, beginning with repeal of the ACA Medicaid expansion, which he criticized in the 2017 repeal bills.) But a second Trump presidency with Democrats in control of one house of Congress (if Trump 2.0 does not effectively neuter Congress by extra-Constitutional means) is as likely as a Republican trifecta. And should that scenario play out, Republicans in Congress are laying the groundwork for a third plank in an assault on the ACA marketplace as we now know it — that is, undermining a marketplace that provides plans with guaranteed issue, Essential Health Benefits, and no caps on coverage to virtually all enrollees in the individual market.

That third plank is blocking renewal of the marketplace premium subsidy enhancements originally provided by the American Rescue Plan Act (ARPA) in March 2021 and extended through 2025 by the Inflation Reduction Act in August 2022. ARPA not only reduced the percentage of income required to pay for a benchmark (second-cheapest) silver plan at every income level — it also removed the income cap on subsidies, which was 400% of the Federal Poverty Level ($51,040 for a single person and $104,800 for a family of four in 2021, when ARPA was implemented). Prior to ARPA, given the high cost of unsubsidized ACA-compliant insurance, the income cap left a major hole in the ACA’s “affordable care” promise — especially for older prospective enrollees, since premiums rise with age. The unaffordability of insurance for several million people dependent on the individual market was Republicans’ main cudgel against the ACA for years. Prospective enrollees who were subsidy-ineligible were the primary constituents for Trump’s alternative STLD market — a bad solution to a real problem.

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While ACA premiums came in somewhat lower than expected when the market launched in advance of Plan Year 2014, they spiked in 2017 — a major correction triggered in part by expiration of the ACA’s temporary national reinsurance program. Average benchmark premiums rose 20% in 2017 — and then soared another 34% in 2018, in a market roiled by Republicans’ ACA repeal drive and Trump’s threatened cutoff of direct reimbursement of insurers for the Cost Sharing Reduction benefit attached to silver plans for low-income enrollees, which he executed in October 2017. (Starting in 2018, the value of CSR was priced directly into silver plans in most states.) The premium hikes decimated off-exchange and unsubsidized on-exchange enrollment in ACA-compliant plans. According to KFF estimates, unsubsidized enrollment in ACA-compliant plans dropped by essentially half from Q1 2016 to Q1 2019, from 6.7 million to 3.4 million. That created at least a potential market for Trump’s medically underwritten STLD plans — and would again, should the income cap on subsidy eligibility snap back into place (as it will in Plan Year 2026, if Congress does not act).

Premiums stabilized after 2018 — and the Trump administration can take some credit for that, as the administration invited states to establish their own reinsurance programs with partial federal funding (15 states did so by 2020) and, at insurers’ request, tightened the rules by which enrollees could obtain Special Enrollment Periods outside of Open Enrollment. Average benchmark premiums were slightly lower in 2024 ($477) than in 2018 ($481). This year, however, premiums are on course for a substantial increase, averaging about 6%, according to Charles Gaba’s tracking of rate requests. That’s barely noticed in a marketplace where more than 90% of enrollees are subsidized. It would be noticed if the income cap on subsidy eligibility were removed. Substantial increases in 2026 and thereafter would help a second Trump administration sell lightly regulated, medically underwritten alternatives.

Democrats are ramping up calls to extend the ARPA subsidy increases, as the pending expiration of the income tax cuts for individuals in the Republican-created 2017 Tax Cuts and Jobs Act provides some leverage. Prominent House Republicans are digging in against extending the ARPA subsidy boosts, characterizing them as “ massive taxpayer-funded handouts to the wealthy and large health insurance companies.” That’s pretty funny, considering that Republicans relentlessly hammered the ACA in pre-ARPA years for leaving those with incomes over 400% FPL high and dry. In any case, most post-ARPA enrollment growth is in the 100-150% FPL income bracket (which the statement cited above also decries) — and almost three quarters of those 2024 enrollees* would be in Medicaid if ten states (including big enchiladas Texas and Florida) were not still refusing to enact the ACA Medicaid expansion. Since Medicaid is cheaper, Medicaid expansion should be a top priority of purportedly budget-conscious Republicans.

Republican opponents of ARPA subsidy expansion are leaning heavily on a paper by Brian Blase, formerly a special assistant to Trump’s National Economic Counsel, alleging rampant overpayment of subsidies in the ACA marketplace. Blase does have a legitimate complaint in the recent explosion of unauthorized enrollment and plan-switching by unscrupulous ACA brokers. That fraud was stimulated in part by ARPA’s zeroing out of premiums for benchmark coverage for enrollees with income under 150% FPL (currently $21,870 for an individual), in combination with an administrative rule enacted in early 2022 that allows not only year-round enrollment to people below that threshold, but also a monthly Special Enrollment Period (SEP), enabling endless plan-switching. While I agree with Blase that that monthly SEP should be eliminated, and that CMS needs to act aggressively to quell broker fraud (as it appears to be doing), Blase attacks the subsidy enhancements with more dubious claims fraud in ACA enrollees’ income estimates — that is, raising or lowering income estimates to maximize subsidies (or access them at all). To those claims, I responded in detail here. The TLDR:

1) Most of the Post-ARPA enrollment increase in the ACA marketplace, as well as most of the increase at incomes where Blase alleges fraud is concentrated, is in states that have refused to enact the ACA Medicaid expansion, where most adults who estimate their incomes below 100% FPL get no government help at all. If substantial numbers of enrollees do in fact have incomes below 100% FPL, the solution is to…enact the ACA Medicaid expansion. People with income below 100% FPL should not be left with no access to affordable coverage.

2) ACA subsidies are based on an estimate of future income, which is inherently uncertain, especially for people at low incomes, who often work uncertain hours, change jobs, are self-employed, or depend on tips. Mismatches between income reported to the IRS and income projected in ACA applications probably have as much to do with inaccuracies in tax reporting as with inaccurate income projections in the ACA application. As for mismatches between income data based on ACA enrollment and data from the Census Bureau’s consumer surveys, those, like mismatches between IRS data and survey data, are perpetual.

3) Blase misreads CMS figures regarding former Medicaid enrollees, disenrolled in the post-pandemic “Medicaid unwinding,” who enrolled in the ACA marketplace in 2024. In HealthCare.gov states, according to CMS tracking, about a third of Medicaid disenrollees enrolled in the marketplace — not 70%, as Blase claims.

CMS needs to stop the broker fraud; should probably end the monthly SEP (though not year-round first-time enrollment for those with income under 150% FPL); and perhaps ramp up income checks on enrollees who may be underestimating their income (as opposed to overestimating it to get over the 100 % FPL threshold). Killing the ARPA subsidies to quell broker fraud would be throwing the baby out with the bathwater. But of course that baby — affordable insurance for those who lack access to affordable employer-sponsored health insurance — is a perpetual target for Republicans. And killing the ARPA subsidy boosts would further another core Republican goal — undermining the ACA’s protections for people with pre-existing conditions.

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* In 2024, 6.9 million marketplace enrollees reported income in the 100-138% FPL range. In the broader 100-150% FPL category, 9,407,463 enrolled in 2024. The 100-138% FPL bracket was not reported in 2021, the last pre-ARPA year. From 2021 to 2024, enrollment in the 100-150% FPL bracket increased from 3.8 million to 9.4 million. That’s an increase of 5.5 million, more than half of the total increase of 9.4 million from 2021 to 2024. See the Marketplace OEP Public Use Files. To compare all-state totals at 100-150% FPL for 2021 and 2024 I excluded Idaho, which did not provide income breakouts to CMS in 2021.

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