UnitedHealth braces for Medicare Advantage scrutiny

By Caitlin Owens

Illustration: Allie Carl/Axios

UnitedHealth Group is bracing for scrutiny from the Trump administration over the way it and other Medicare Advantage insurers bill the government, along with other cost-related topics, an executive at the health company told Axios.Why it matters: Mehmet Oz’s characterization of the Medicare Advantage system as “upside down” during his Senate confirmation hearing to become Centers for Medicare and Medicaid Services administrator on Friday may have surprised those who assumed he’d enter office as a champion for the program.Driving the news: Oz pointed to the way the U.S. pays more for Medicare Advantage than traditional Medicare and specifically discussed the practice of “upcoding,” in which insurers categorize patients as sicker in order to get higher payments.”I pledge if confirmed, I will go after it,” he said.Oz also brought up prior authorization in MA, saying it could be streamlined and is a “pox on the system,” Axios Pro reported.He floated limiting the number of procedures subject to prior authorization by insurers at 1,000, and said reviews should happen more rapidly, including through the use of AI tools.State of play: A growing chorus of MA critics, including a federal watchdog, has been calling for more scrutiny of the program.UnitedHealth, the biggest MA insurer, has specifically been accused of gaming the system in order to extract high payments from the federal government. The company has denied the accusations.Health insurer trade group AHIP says it will engage with the new administration on MA, which now cares for more than half of all Medicare beneficiaries.What they’re saying: “We’re excited to have a conversation” about whether to continue the push for value-based care or to “stay stuck in fee-for-service, which is volume-based and which is doing nothing to actually improve people’s health,” a UnitedHealth Group executive said at an Axios event sponsored by the company, hours after Oz’s remarks. The executive was granted anonymity so they could speak freely about the breaking news.”Part of that conversation is about coding, and diagnosing whether patients are sick and if so, what can we do about it?” the executive said.The big picture: On Monday, the Better Medicare Alliance launched a video ad urging President Trump to “secure and protect” Medicare Advantage, a further signal that some industry players see threats to the program looming ahead.”We share Dr. Oz’s goal of strengthening Medicare Advantage for seniors and taxpayers, and we look forward to working with him on policy solutions to accomplish this,” Mary Beth Donahue, CEO of the group, told Axios in a statement after Friday’s hearing.What to watch: The first major test of the administration’s stance toward the program will occur in the coming weeks, when it will finalize MA payment rates for next year.Read morefrom STAT:U.S. House panel launches antitrust probe of medical residency system, ReutersOpinion: RFK Jr.’s regenerative medicine roundtable on stem cell deregulation raises red flags, STATNew antibody studies boost hope for HIV cure, ScienceNIH cancels funding for landmark diabetes study at a time of focus on chronic disease, STATWHO issues starkest warning yet on fallout from U.S. withdrawal of aid for global health, STATfrom Politico:12 DRUGMAKERS IN ON TALKS — The Trump administration said Monday the manufacturers of 15 drugs have agreed to participate in the second round of Medicare drug price negotiations.Among the drugs selected are Novo Nordisk’s Ozempic and Wegovy — the costly diabetes and anti-obesity drugs that have exploded in popularity for weight loss. Other drugs include those that treat asthma, chronic obstructive pulmonary disease and different types of cancer.Background: HHS announced the 15 drugs selected for the second round of negotiations in mid-January, just days before President Joe Biden left office. The Trump administration is tasked with negotiating the prices that will take effect in 2027.The drugmakers had until Feb. 28 to decide whether they would enter into negotiations with the government.Medicare drug price negotiation was one of several reforms signed into law by the Biden administration to lower prescription drug prices. A provision in the Inflation Reduction Act, the program requires HHS to negotiate drug prices for certain medications covered under Medicare Part D and, starting in 2028, Medicare Part B.Key context: In the first round of negotiations, all the manufacturers agreed to enter the price talks. Even so, several drugmakers and PhRMA — the top brand pharmaceutical trade group — sued the government, claiming the talks were unconstitutional.When the prices negotiated in the first round go into effect in 2026, it will result in $6 billion in savings for the government and older Americans could save roughly $1.5 billion in out-of-pocket costs, according to the Biden White House at the time.

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