DAILY TRIFECTA: The Profit Motive, The Means & The Opportunity
UnitedHealth is at the scene of a number of crimes
THE SET-UP: Cable infotainment networks have been in their element since UnitedHealth CEO Brian Thompson was gunned-down on a New York street early Wednesday morning. CNN and MSNBC have been particularly obsessed with tracking the manhunt and speculating about the motive. It’s understandable given the ratings collapse both have suffered in the wake of Trump’s Election Day win. American audiences have a demonstrable obsession with “true crime” stories, movies, TV shows and podcasts. Murder is ratings gold.
What they see far less of are the true crimes being committed by the healthcare industry on a daily basis. Most Americans don’t know that A.I. and algorithms are automating the denial of healthcare. Most Americans don’t know that healthcare at rural hospitals is disappearing. Most Americans don’t know that private equity is gobbling up the industry, including small practices. And most Americans don’t know about the private equity-driven collapse of the Steward health system.
Although many Americans experience these offenses on a personal level, these corporate-level crimes and the ominous, overarching trend-lines shaping America’s for-profit health system remain largely unexplored by cable and broadcast media … and, given the increasing atomization of all media, it might not matter if they did. The sad reality is that a story has to “go viral” in a big way before it can jump like a mutating virus from one platform to the next. Otherwise, stories and the outrage they inspire are effectively quarantined on disparate platforms where they only re-infect people who remain socially distant from people who have no exposure to the same information.
We are not just divided … we are subdivided. It makes it easier than ever to be a conqueror. Just ask private equity. They are running out of worlds to conquer. - jp
TITLE: Thompson, UnitedHealth kept probe secret and misled investors, lawsuit claims
https://insurancenewsnet.com/innarticle/thompson-unitedhealth-kept-probe-secret-and-misled-investors-lawsuit-claims
EXCERPTS: [Brian] Thompson joined UnitedHealth Group in 2004 and was named CEO for UnitedHealthcare in April 2021. A few months prior to that, on Jan. 6, 2021, UnitedHealth announced its largest acquisition ever: Change Healthcare, a health technology company, for $13 billion.
Change operated a clearinghouse, processing health insurance claims and moving data from entity to entity. According to a UnitedHealth estimate, more than half of American medical insurance claims “pass through (or touch)” Change’s systems.
On Feb. 24, 2022, the Department of Justice sued to block the Change acquisition on antitrust grounds, arguing UnitedHealth would gain access to sensitive data that it could wield against its competitors. UnitedHealth prevailed and the Change acquisition was finalized.
Throughout the dispute, UnitedHealth executives insisted that the company had “internal firewalls that prevent the sharing of competitively sensitive information across business units,” plaintiffs say.
Shares soared from about $350 per share when the Change acquisition was announced to more than $500 per share in February 2024, when Change networks fell victim to a systemwide cyberattack.
By that point, UnitedHealth executives were already keeping secrets from investors, plaintiffs allege in the Minnesota class-action lawsuit. On Oct. 10, 2023, UnitedHealth received notice that the DOJ had launched a “non-public antitrust investigation into the company,” the lawsuit states.
“Concealing this material information from investors and the public, UnitedHealth chairman Stephen J. Hemsley and several other senior executives immediately took action – selling more than $100 million of their own UnitedHealth stock at artificially inflated prices as the market and other investors remained unaware of the new federal antitrust investigation,” the lawsuit claims.
When the Wall Street Journal exposed the investigation in a Feb. 27, 2024 article, the price of UnitedHealth stock declined over $27 per share, falling from $525.32 per share on Feb. 26, 2024 to $498.28 on Feb. 28, 2024, the lawsuit notes.
In response, Sen. Elizabeth Warren, D-Mass., was among lawmakers from both parties to call for investigations of UnitedHealth.
“Because UnitedHealth has bought up every link in the healthcare chain, it’s in a position to jack up prices, squeeze competitors, hide revenues, and pressure doctors to put profits ahead of patients. UnitedHealth is a monopoly on steroids,” Warren said in a statement.
TITLE: UnitedHealthcare CEO was facing a DoJ probe when he was executed
www.dailymail.co.uk/news/article-14157793/unitedhealthcare-ceo-brian-thompson-doj-investigation-shot-dead.html
EXCERPTS: Last year the DoJ launched a probe into whether the private company of the nation's biggest insurer, led by Thompson, was unfairly restricting competitors and running a monopoly.
In May, the City of Hollywood Firefighters’ Pension Fund initiated a complaint against Thompson and other executives, accusing the CEO of failing to tell investors about the federal probe before he unloaded over 31 percent of his stock, taking in $15.1 million in proceeds.
In legal documents, the fund said Thompson and other company execs sold over $117 million worth of UnitedHealth common stock during the four-month period when insiders knew about the federal antitrust investigation but the public did not.
The California Public Employees’ Retirement System, America's largest state public pension fund, then joined that complaint in October and filed an amendment seeking a jury trial against the UnitedHealth execs including Thompson.
The Wall Street Journal reported in February that federal investigators had been interviewing healthcare industry representatives in sectors where UnitedHealth competes, including doctor groups.
Investigators have asked about issues including certain relationships between the company's UnitedHealthcare insurance unit and its Optum health services arm, which owns physician groups, among other assets.
Thompson was accused of being aware of the DoJ probe into the company, and not telling investors before he unloaded over 31 percent of his stock
The WSJ also reported that the DOJ was examining the company's Medicare billing practices to see if doctors are aggressively characterizing their patients illnesses to wrongly increase payments from the government.
TITLE: How UnitedHealth’s Playbook for Limiting Mental Health Coverage Puts Countless Americans’ Treatment at Risk
https://www.propublica.org/article/unitedhealth-mental-health-care-denied-illegal-algorithm
EXCERPTS: For years, it was a mystery: Seemingly out of the blue, therapists would feel like they’d tripped some invisible wire and become a target of UnitedHealth Group.
A company representative with the Orwellian title “care advocate” would call and grill them about why they’d seen a patient twice a week or weekly for six months.
In case after case, United would refuse to cover care, leaving patients to pay out-of-pocket or go without it. The severity of their issues seemed not to matter.
Around 2016, government officials began to pry open United’s black box. They found that the nation’s largest health insurance conglomerate had been using algorithms to identify providers it determined were giving too much therapy and patients it believed were receiving too much; then, the company scrutinized their cases and cut off reimbursements.
By the end of 2021, United’s algorithm program had been deemed illegal in three states.
But that has not stopped the company from continuing to police mental health care with arbitrary thresholds and cost-driven targets, ProPublica found, after reviewing what is effectively the company’s internal playbook for limiting and cutting therapy expenses. The insurer’s strategies are still very much alive, putting countless patients at risk of losing mental health care.
Optum, its subsidiary that manages its mental health coverage, is taking aim at those who give or get “unwarranted” treatment, flagging patients who receive more than 30 sessions in eight months. The insurer estimates its “outlier management” strategy will contribute to savings of up to $52 million, according to company documents.
The company’s ability to continue deploying its playbook lays bare a glaring flaw in the way American health insurance companies are overseen.
While the massive insurer — one of the 10 most profitable companies in the world — offers plans to people in every state, it answers to no single regulator.
The federal government oversees the biggest pool: most of the plans that employers sponsor for their workers.
States are responsible for plans that residents buy on the marketplace; they also regulate those funded by the government through Medicaid but run through private insurers.
In essence, more than 50 different state and federal regulatory entities each oversee a slice of United’s vast network.
So when a California regulator cited United for its algorithm-driven practice in 2018, its corrective plan applied only to market plans based in California.
When Massachusetts’ attorney general forced it to restrict the system in 2020 for one of the largest health plans there, the prosecutor’s power ended at the state line.
And when New York’s attorney general teamed up with the U.S. Department of Labor on one of the most expansive investigations in history of an insurer’s efforts to limit mental health care coverage — one in which they scored a landmark, multimillion-dollar victory against United — none of it made an ounce of difference to the millions whose plans fell outside their purview.
It didn’t matter that they were all scrutinizing the insurer for violating the same federal law, one that forbade companies from putting up barriers to mental health coverage that did not exist for physical health coverage.
For United’s practices to be curbed, mental health advocates told ProPublica, every single jurisdiction in which it operates would have to successfully bring a case against it.
“It’s like playing Whac-A-Mole all the time for regulators,” said Lauren Finke, senior director of policy at the mental health advocacy group The Kennedy Forum. The regulatory patchwork benefits insurance companies, she said, “because they can just move their scrutinized practices to other products in different locations.”
Now internal documents show that United, through its subsidiary Optum, is targeting plans in other jurisdictions, where its practices have not been curbed. The company is focused on reducing “overutilization” of services for patients covered through its privately contracted Medicaid plans that are overseen by states, according to the internal company records reviewed by ProPublica. These plans cover some of the nation’s poorest and most vulnerable patients.
United administers Medicaid plans or benefits in about two dozen states, and for more than 6 million people, according to the most recent federal data from 2022. The division responsible for the company’s Medicaid coverage took in $75 billion in revenue last year, a quarter of the total revenue of its health benefits business, UnitedHealthcare.
UnitedHealthcare told ProPublica that the company remains compliant with the terms of its settlement with the New York attorney general and federal regulators. Christine Hauser, a spokesperson for Optum Behavioral Health, said its process for managing health care claims is “an important part of making sure patients get access to safe, effective and affordable treatment.” Its programs are compliant with federal laws and ensure “people receive the care they need,” she said. One category of reviews is voluntary, she added; it allows providers to opt out and does not result in coverage denials.
ProPublica has spent months tracking the company’s efforts to limit mental health costs, reviewing hundreds of pages of internal documents and court records, and interviewing dozens of current and former employees as well as scores of providers in the company’s insurance networks.
One therapist in Virginia said she is reeling from the costly repercussions of her review by a care advocate. Another in Oklahoma said she faces ongoing pressure from United for seeing her high-risk patients twice a week.
“There’s no real clinical rationale behind this,” said Tim Clement, the vice president of federal government affairs at the nonprofit group Mental Health America. “This is pretty much a financial decision.”
Former care advocates for the company told ProPublica the same as they described steamrolling providers to boost cost savings.
One said he felt like “a cog in the wheel of insurance greed.”