Beyond the Byline: UnitedHealth Group COVID-19 vaccine reimbursement policy draws congressional investigation

Modern Healthcare Senior Hospital Operations Reporter Alex Kacik and Insurance Reporter Nona Tepper talk about the largest insurer in the country, potentially short-changing pediatricians who were vaccinating children against COVID-19.

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Alex Kacik: Hello, and welcome to Modern Healthcare's Beyond the Byline, where we offer a behind the scenes look into our reporting. I'm Alex Kacik, Senior Operations Reporter. Our Insurance Reporter, Nona Tepper, is joining me today to talk about the largest insurer in the country, potentially short-changing pediatricians who were vaccinating children against COVID-19. Thanks for coming on, Nona.

Nona Tepper: Thanks for having me, Alex.

Alex Kacik: So Nona, you shed some light on UnitedHealth Group's low reimbursement rates of COVID-19 vaccines. And your reporting showed that the around $300 billion insurer, let me look at their annual revenue, was paying only about half of the federal rate, and it was the only national insurer paying that low of a rate. What did you learn as you dug into the story?

Nona Tepper: I think you kind of summed it up there. But it appears that they were mostly targeting pediatricians, who knows why on that end? And independent providers. I think the argument, at least if you ask providers, was that they're so large that providers can't afford to lose the business. And they'll just accept the terms and accept like the maybe $20 that they were given, and accept the fact that they have to take a loss for helping to prevent the spread of the pandemic. When we asked UnitedHealth Group about it, they were just like, "We have so many health plans and payment types that we're having trouble updating our reimbursement systems." But I mean, if they're too large to correctly pay providers, I think that's a symbol that there's a problem there.

And they also mentioned, technically the CMS had recently changed the payment rates after it was found that it was underpaying providers, and they were taking a loss on administering the vaccines. So technically, they didn't have to pay the CMS amount, and maybe they were having trouble adapting to the changes, but it was just kind of astounding that a company that is so profitable and so powerful wouldn't do their part to prevent the spread of this global pandemic, especially when it seems like they can afford to.

Read more: 
CMS boosts reimbursement for administering COVID-19 vaccinations
CMS ups Medicare payments for at-home COVID-19 vaccinations

Alex Kacik: To be said, just in terms of United's size and power, they dictate a lot when it comes to reimbursement trends and, you know, they set the bar in a lot of ways, and it'll be a focus of a lot of different topics in healthcare that we'll get into. But I was hoping you could tell us a little bit more about how you got started on this story and how it progressed.

Nona Tepper: This was a weird one to report. I got a tip from a vaccine administration startup called Canid Vaccines, that according to their very small sample size, they're in beta mode, that UnitedHealth Group was under paying pediatricians for giving the Johnson & Johnson, Pfizer or Moderna vaccines. And I was like, "Wow, that's an astounding claim. All right." So I talked to the startup, I asked to see their data, and eventually they were able to connect me with a pediatrician who showed me all his bills, showed me his correspondence with United, that verified they were underpaying him. And eventually, he was able to connect me with some other pediatricians he knew through an internal LISTSERV, and it was only after I interviewed probably four or five independent providers about this issue that I got some of the professional societies to agree to speak to me. They seem hesitant to initially talk about the issue with UnitedHealth Group. And I've got to wonder, is it just because they don't want to rock the boat?

Alex Kacik: So since you reported this story, this has caught the attention of Congress and spurred some of their own investigations. You know, I'm wondering, what have you noted has changed since you reported this in September, and what can we expect going forward, do you think?

Nona Tepper: Well, I'm happy to update you guys, that they have paid back at least 1.6 million providers who they were underpaying for administering the vaccine. It doesn't seem like there's any issues at this point. So it does seem like they've been able to adopt the new payment standards and update their reimbursement. I'm not really sure where they're at with administering payments for the COVID-19 testing. They had also run into issues for underpaying pediatricians for COVID-19 testing services, and they were slow to react to that. I heard actually that a COVID-19 testing manufacturer decreased their rates for pediatricians to purchase these tests, as opposed to UnitedHealth Group reimbursing the rate that everyone else was for paying providers for testing people for coronavirus. So that was interesting. I'm happy to admit though that at least the COVID-19 vaccine administration they've updated their reimbursement for.

Alex Kacik: So a lot of us shoot for getting recognized at least from lawmakers, and then they have a chance to use our reporting to implement laws that have pretty widespread impact. I wanted to hear your reaction, as we saw recently, this is from the January 20th issue of the Congressional Record. It reads, "I ask unanimous consent to have printed in the record the following documents; a September 3rd, 2021, Modern Healthcare article detailing UnitedHealth's under reimbursement for COVID-19 vaccines compared to most other major carriers." Nona, take me through what you felt when you read that and what that means?

Read more:
UnitedHealthcare pays providers below standard rates for COVID-19 vaccines

Nona Tepper: It was so surprising and flattering, and just so super cool. One thing I forgot to mention while I was reporting this is, as I was looking into it, and when I finally got connected with the professional society, I had gotten a tip that a few other reporters were on this story, and so I felt like, "Oh my God, I got to rush and write this in like two hours." So I'm happy this story turned out, I'm flattered that I was the only article that they put in the Congressional Record about this issue. And also, fun fact, this happened on my birthday. COVID birthdays can be a kind of a bummer and this was just such a ray of sunshine for me. So this was super cool and it's definitely the biggest impact I've ever had, and potentially will ever have. So thanks for sharing this moment in the spotlight with me.

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?

Read more:
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.