President Donald Trump signed Congress' largest COVID-19 stimulus package, the Coronavirus Aid, Relief, and Economic Security Act, on March 27. The law directed HHS to send $100 billion to healthcare providers, but provided little other guidance.
The letter contract says UnitedHealthcare and HRSA held discussions on the contract between April 4 and April 7, the effective date of the contract. UnitedHealthcare sent the first direct deposits to providers on April 10.
The letter contract outlines confidentiality guidelines for UnitedHealthcare's handling of information collected from healthcare providers. Some experts have voiced ethics concerns about how UnitedHealthcare was chosen for the contract, why the work was outsourced, and what valuable data the company could have obtained through the arrangement. One of the White House officials overseeing the Provider Relief Fund had prior financial ties to UnitedHealth, Politico reported.
"Any information provided to the contractor (and/or any subcontractor) by HHS or collected by the contractor on behalf of HHS shall be used only for the purpose of carrying out the provisions of this contract and shall not be disclosed or made known in any manner to any persons except as may be necessary in the performance of the contract," the letter contract states.
Providers had to submit financial information to either receive or retain a payment from the second, $20 billion tranche of general grant funding that was distributed based on net patient revenue.
UnitedHealth Group has been a leader in acquiring physician practices in recent years. The company received $49 million from the Coronavirus Aid, Relief, and Economic Security Act's provider relief fund, but returned the money to HHS.
Paul Keckley, an industry consultant and managing editor of The Keckley Report, said the data protections amounted to a "firewall" between UnitedHealthcare and other divisions of the company. Providers who submitted financial data have little cause for concern, Keckley said.
"I think after seeing the terms of the contract, I wouldn't be concerned any more than with any other compliance request. It poses a low risk," Keckley said.
The guardrails are only effective, however, if they are enforced.
"This gets right down to enforcement of it, and whether that is meaningful. If no there is no meaningful enforcement, they could try to use data beyond the scope of the contract," said Wendell Potter, former head of communications at Cigna who has turned to pro-Medicare for All activism.
The letter contract states UnitedHealthcare will be paid up to $500,000 for contract-related expenses while a final contract is negotiated. UnitedHealthcare submitted a proposal for a fixed-price $1 million contract, which is the estimated size of the final contract.
Stephanie Johnson, a senior analyst at RSM US specializing in government contracting, says the firm fixed-price contract structure that HRSA and UnitedHealthcare used generally puts the financial risk on the contractor.
Keckley called the potential $1 million compensation a "rounding error" for a behemoth like UnitedHealth Group, and said the work was essentially pro bono as the company may lose money administering the payments and maintaining support services for providers.
"This was not just a goodwill gesture, but also a strategic positioning effort," Keckley said.
Potter said one reason UnitedHealthcare may have chosen to take on the task instead of leaving it to CMS could have been the potential for good publicity as large, for-profit insurers have posted big profits during the pandemic.
HRSA is paying United Healthcare up to $3.1 million to administer a related, but separate program that reimburses healthcare providers for coronavirus-related testing and treatment costs for uninsured patients.
"UnitedHealth Group is honored to have been asked to assist the U.S. Department of Health and Human Services in distributing, as directed by the department, emergency funding to healthcare providers seeking assistance under the CARES Act," UnitedHealth Group Vice President of Media Relations Eric Hausman said. "As previously indicated, we will donate all the fees paid to us for this work to supporting COVID-related activities."
As of the first week in November, HHS has made a total of $106 billion in grant payments from the Provider Relief Fund, not including payments for COVID-19 testing and treatment of the uninsured.