Andrew Witty, CEO of UnitedHealth Group, announced his resignation on May 13th for “personal reasons.” Translation: he’s employing his golden parachute after United’s “annus horribilis” of 2024, which is continuing unabated into 2025 amid falling stock value. United’s own shareholders have even filed suit on the grounds that United allegedly misled them about the company’s financial outlook in the wake of Brian Thompson’s murder on December 4, 2024.
So why not deploy the golden parachute? Despite all United’s troubles last year, Witty “earned” $26.3 million in total compensation for 2024, the highest of any insurance payer CEO.
While Witty floated away on his golden parachute, United’s stock immediately plummeted 17.8%, and its freefall dragged other giant healthcare insurers behind it into a downward spiral as well:
- CVS (Aetna) down 6.65%
- Humana down 9.5%
- Centene (various Medicaid managed care and Marketplace payers) down 6.2%
- Elevance (Anthem BCBS, NGS Medicare, Carelon Behavioral Health) down 9.9%
What’s really going on?
United held an investor conference call yesterday, and their CFO listed the reasons things are going south:
- United’s new members are sicker than expected
- Higher Medicare “Advantage” utilization
- “Indications of a broadening of this higher trend to other areas”
What he’s really saying is: We have too many sick people! and How dare these sick people actually try to USE their health insurance?!
Will Witty’s golden parachute affect therapists?
That’s the real question. While I don’t have a crystal ball, I can make a few guesses. And none of them seem likely to be good news for us.
- Aggressive “risk adjustment” activity
- Audits / pre-payment reviews
- Clawbacks
- Reimbursement rates
- Premiums
Aggressive “risk adjustment” activity
As 2024 risk adjustment audits begin, any healthcare provider can expect an audit by United or an outsourced vendor on Medicare Advantage, Medicaid, or Marketplace members they treated in 2024. These “risk adjustment” audits have one purpose: make members look as sick as possible.
Why? The government finances these plans on a flat per member/per month fee to the insurers. In a “value-based” model such as Medicare Advantage or Medicaid managed care, that flat fee must pay for all care delivered. If the company spends more than they collect from the government…bye bye profits. So annual “risk adjustment” audits are the means by which United and other insurers “prove” they had significantly sicker members than was expected. And as a result, the federal government kicks in extra taxpayer money to “adjust.”
I’ve written before about the data-mining tactics used in risk adjustment audits and how mental health clinicians can work to safeguard client privacy to the best of their ability.
Audits / pre-payment reviews
Optum Behavioral Health, owned by United, has never been exactly shy about utilizing retrospective audits to look at documentation standards compliance or “medical necessity.” But in 2024, there was (coincidentally?) a new trend that Optum began to employ: the pre-payment review. A pre-payment review is the same thing as an audit – the only difference is that it occurs before any claims are paid, not afterwards. And instead of a clawback, the claims are denied if the reviewer determines that the documentation isn’t satisfactory or treatment wasn’t “medically necessary.”
The majority of audits and prepayment reviews will most likely be for clients with the government “value-based care” plans. Clinicians treating clients with employer plans are less likely to suffer negative effects from Witty’s golden parachute. Why? Because United isn’t going to want to anger employers, who have the power to decide that if United denies too many claims or hassles their employees too much, they’ll hire Blue Cross, Aetna, or Cigna instead.
Clawbacks
Clawbacks – when an insurer says “too bad, we shouldn’t have paid you” – even years after paying – are dreaded by anyone who accepts insurance, and inflict feelings of stress, anger, and hopelessness. It’s unjust to have to fight to keep money you rightfully earned. In what other industry does this happen? While there are ways to reduce the risk of clawbacks and effectively fight them, it’s impossible to remove the stressful hassle that takes away from client and self care. Worse, numerous administrative nightmares eventually steal the joy clinicians derive from their practices. Burnout is a real problem.
If we only get 120 days to file claims, why can United claw back after 2 years? Clawbacks are a systemic issue that won’t be addressed just because a CEO employs a golden parachute. They can only be changed through assertive advocacy and legislation backed up by rigorous enforcement.
Reimbursement rates
Therapists aren’t likely to be offered the golden parachute! At best, reimbursement rates will stay stable, which is an effective decrease given inflation. I recommend paying close attention to how your claims are paid, and employ strategies to monitor for underpayments.
Private payers who offer managed Medicare and/or Medicaid plans can legally reimburse clinicians less than the maximum fees allowed by the government. Which means it’ll be the most vulnerable clients who are likely to be hardest-hit, if clinicians feel forced to leave due to falling reimbursement rates.
Premiums
Will rise.* In the high-flown corporate jargon of the new CEO:
We are incorporating these higher cost experiences and expectations in our 2026 Medicare Advantage bids … as well as our pricing in other markets. We remain committed to providing … high-quality medical offerings to the members … but we will also appropriately price and adjust our offerings to return to our long-term target margin range.
Gotta keep Wall Street happy!
As always, I hope I’m wrong, and hate it if I’m right! Whichever way it turns out, I’ve got your back if you need help with United or any other insurer about claims, contracting/credentialing, clawbacks, or anything else.
*The new CEO of UHG’s signing bonus? $60 million. Small change…
