A recent Senate Judiciary Committee investigation concluded that UnitedHealth Group — the largest health insurer in America — appears to exploit the Medicare Advantage system to generate billions in excess profits.
The report, released by Sen. Chuck Grassley (R-Iowa), details how UnitedHealth developed specific strategies to maximize payments from the federal government. Investigators reviewed more than 50,000 pages of internal company documents, including training materials and audit tools.
The findings suggest the company turned a technical billing process into a revenue driver, often with little evidence that patients received improved care for the additional funds the government paid.
How risk adjustment works
To understand the report, you need to understand how Medicare Advantage pays insurers. Unlike traditional Medicare, which pays for each service performed, Medicare Advantage health insurance plans receive a set monthly fee for each enrolled member.
This fee is risk-adjusted. So if a member has a serious health condition — like diabetes or heart disease — the government pays the insurer more money each month to cover the expected higher costs of their care.
This system was designed to prevent insurers from only signing up healthy people. However, the Senate report suggests UnitedHealth used it to artificially inflate the “sickness” of its members to boost revenue.
According to the report, UnitedHealth treated risk adjustment not as a tool for fair payment, but as a “major profit-centered strategy.”
Mining medical records for cash
The investigation outlines the tactics UnitedHealth used to identify and submit as many diagnosis codes as possible:
- Chart reviews: Teams of coders were reportedly hired to run secondary reviews on medical records and look for conditions that doctors might have noted but not billed for. When they found one, they submitted it to Medicare for payment.
- Home assessments: UnitedHealth sent nurse practitioners into members’ homes for “health risk assessments,” according to the report. These visits frequently resulted in new diagnoses that increased payments. However, the report notes that these visits often did not lead to follow-up care or treatment for the newly found conditions. We reported on this costly practice last year.
- Provider incentives: The report details how the insurer offered financial incentives to doctors to identify more conditions.
Among the review’s findings is also the lack of symmetry in UnitedHealth’s auditing process.
While the company invested resources in finding “under-coded” charts (where they could claim more money), they didn’t apply the same rigor to finding “over-coded” charts (where they had been paid too much).
When insurers find an error that resulted in an overpayment, they’re supposed to refund that money to the government. The investigation suggests UnitedHealth’s systems were designed to identify revenue opportunities while ignoring errors that would require them to pay back money.
What this means for taxpayers
This behavior has a direct impact on the financial health of Medicare. When insurers are overpaid, it drains the Medicare Trust Fund faster, potentially threatening benefits for future generations.
As Grassley explains in a statement accompanying the report:
“Bloated federal spending to UnitedHealth Group is not only hurting the Medicare Advantage program, it’s harming the American taxpayer.”
The report stops short of alleging criminal misconduct but highlights a systemic issue where incentives are misaligned. When an insurer can make more money by finding codes rather than by managing health, the focus can easily shift from patient care to data mining.
Potential changes to the system
This report is part of a growing wave of scrutiny regarding Medicare Advantage overbilling. While it does not immediately change how your plan works, it adds pressure on Congress and the Centers for Medicare and Medicaid Services to crack down on these practices.
For now, people with Medicare Advantage plans — regardless of the provider — should be on the lookout for chart accuracy. Regularly review your medical records to ensure the diagnoses listed in your charts and files match the care you’re receiving.