Beyond the Byline: UnitedHealth Group COVID-19 vaccine reimbursement policy draws congressional investigation
Alex Kacik: Quite the birthday present there, that’s so cool. And looking forward, I think this is just one element where UnitedHealthcare will be gauged on in terms of how they reimburse, what they look like from an oversight and regulatory perspective. In particular, I know the FTC and DOJ are revamping their antitrust policies, which are expected to reflect the more strict philosophy of their new chair. And they have pledged to do more retrospective analyses of mergers, and UnitedHealth would be a fascinating case study. I know you’ve covered their Change Healthcare acquisition, which I’ve heard anecdotally from sources, a lot of lawyers are keeping an eye on that to see how regulators view that. Generally, it’s a lot harder to undo these deals after they’re done. So like trying to, after some of these deals have been completed and unwind them, that’s a whole nother challenge, but, you know, it has lawyers and economists wondering whether they would try to break up certain parts of the company to restore some competition because it touches so many elements of healthcare.
I mean, they have consulting services, they have some of the most employed physicians in the country. They have a huge revenue cycle arm. So what did you make of their most recent acquisitions and that evolving regulatory picture?
Change Healthcare may divest $1B for regulatory OK on UnitedHealth deal
UnitedHealth’s Optum to acquire Change Healthcare in $13B deal
Nona Tepper: Yeah, that’s a good question. And they are certainly a fascinating and impressive organization, and they touch so many different parts of healthcare. This $13 billion acquisition has caught the attention of hospital associations, pharmacists, antitrust advocates, and more. And it’s because they do touch so many different parts of the healthcare system. Hospitals say it could give them an edge and an unfair advantage in healthcare IT services, pharmacists say it could give them an edge on drug dispensing data and other insurers’ claims, so they could figure out what their competitors are paying for a specific service, and antitrust advocates say they’re just so big. Back to the vaccine thing, their argument was, “Well, we’re just so big, we couldn’t get it straight.” And it’s like, “You’re kind of making a case for this acquisition not to happen.” Since they announced the deal last year, it’s been delayed.
Regulators have asked for more information about the deal. UnitedHealth Group has said, “We could divest. And if we divested more than $650 million, it would be unduly burdensome.” Change Healthcare is reportedly looking to offload its revenue cycle management business as a way to get the deal to go through. But the same day that news broke that Change was looking to divest this subsidiary, antitrust regulators came out in a pretty aggressive speech saying sometimes divestitures aren’t the answer. And these deals are too big and we need injunctions to just stop them. And case law needs to be updated to reflect that vertical integration is a big problem. So, you could go both ways. You could say the fact that Change is looking to sell this business, it means discussions are going forward and it’s going to happen. Or you could say, the same day that Change announce it, well, reportedly says they’re going to offload this business, antitrust regulators come out with a pretty aggressive speech, it could portend negative things for this deal. It’ll be interesting to follow.
Alex Kacik: Yeah. And just from a feasibility perspective, you would think that they would try to establish new framework, regulatory oversight framework when it comes to new deals, trying to come back this from a retrospective point of view, is so much harder like you were saying. And it just, it’s hard to imagine how you unscrambled eggs, so to speak, and try to inject more competition amongst these markets that have been operating under these conditions for some time. So I wanted to highlight some of our other reporting too, UnitedHealth has been in the cross hairs in several topics. There have been lawsuits alleging that it has manipulated risk scores for Medicare Advantage beneficiaries to boost profits. But this case in particular reminds me of a story that your predecessor, Shelby Livingston, wrote about, how United wasn’t covering urinary catheters.
Read more: Out of sync: UnitedHealthcare urinary catheter exclusion is painful for patients
And it excluded urinary catheters for coverage for many commercial plans, unlike most insurers, and lumping them in the same category as other excluded disposable supplies like bandages and gauze. And Shelby was able to dig down on what are the consequences for folks, for especially kids who have Spina bifida and these debilitating conditions, where you have to go through multiple of these products a day. And it really adds up over time. We’ve also seen insurers clamping down on emergency room visits and clawing back money that they deemed wasn’t… a reimbursement that they deemed wasn’t necessary given the condition of the patient. They said it wasn’t an emergency for this patient to seek care. So that has created more of a sticking point between providers are saying these insurers are trying to control how we administer care and what the most effective treatment is. So what do you make of the trend of insurers that are tightening the reins on their reimbursement policies?
Nona Tepper: I think that’s just what health insurers do. Their job is to limit costs and so they’re doing that through whatever mechanisms possible. The disclosure that you mentioned, that UnitedHealth Group was going to just decide not to pay retroactively for some emergency room services was just astounding. And it really shook the industry. They’ve since paused that policy until the pandemic is over apparently, but it was just, wow, we’re in the middle of a global pandemic, you’re unveiling this now, when you’ve apparently made record profits. It was just, I don’t know what to make of this trend, but it does seem like insurers are getting more aggressive with their reimbursement policies. And it also seems like insurers are evolving what role they want to play in the industry because UnitedHealth Group, as you said, they would be a fascinating case study because in addition to being the nation’s largest insurer, they’re also the largest employer of physicians, with 60,000 providers.
They’re one of the largest, if not the largest pharmacy benefit manager in the industry, and they’re a leader when it comes to revenue cycle management and health IT services. So what is UnitedHealth Group? They’re not an insurer, they are the healthcare industry. And I think it’s good that federal regulators are considering taking a very close look at the Change Healthcare acquisition and other acquisitions going forward because vertical integration is a thing. It’s not just UnitedHealth Group, although they kind of set the tone for the industry. Insurers are evolving from being simply insurers to providers, business service administrators, a whole bunch of other stuff.
Alex Kacik: And on that note, stay tuned. Nona and I are looking at this trend of the blending roles of providers and insurers. So we’ll definitely be looking into United for a feature that’s later to come out, I believe in a month or so. So yeah, we’re excited to dig into this more. In the meantime, we appreciate you listening, and if you’d like to subscribe and support our work, there’s a link in the show notes. You can subscribe to Beyond the Byline on Spotify, Apple Podcasts or wherever you listen to your podcasts. You can stay connected with our work by following Nona and I and Modern Healthcare on Twitter and LinkedIn. We appreciate your support. And Nona, thanks so much for coming on.
Nona Tepper: Thanks for having me. Please feel free to reach out with tips about UnitedHealth Group.