UnitedHealthcare cancels agreements with doctors servicing Medicare Advantage patients

As of February, more than 2,000 physicians will be dropped from UnitedHealthcare’s Medicare Advantage program in Connecticut. Although you’ll see this referred to as a profit-related move in the media, this is not about United being greedy.

President Obama said you could keep your physician and keep your health plan. He lied to you. Hidden in one paragraph of Matthew Sturdevant’s blog post at the Hartford Courant’s website is this…

The federal government, through its Centers for Medicare & Medicaid Services, has instituted a five-star quality rating system that provides incentives to insurers to reduce costs, [Mark] Thompson [Fairfield County Medical Association] said, citing it as a contributing factor in the UnitedHealthcare change.

That paragraph is referring to changes including those brought to us by President Obama’s Affordable Healthcare Act. New regulations implemented this year may certainly be the primary catalyst for this change by United. I don’t like referring to Wikipedia, but here’s a snippet.

The health reform legislation (the Patient Protection and Affordable Care Act of 2010) ties federal reimbursement rates for insurance carriers administering Medicare Advantage products to performance, as measured by the Stars rating system. Bonus payments are attached to stars ratings, and bonus revenue will be awarded, gradually increasing with maximum bonus opportunity in 2014. According to the Congressional Budget Office, payment reforms for Medicare Advantage plans based on Stars scores are projected to save billions of dollars in federal health care spending.

In short, these changes are being driven almost exclusively by the federal government, not a desire to increase profits at UnitedHealthcare. The Centers for Medicare and Medicaid Services (CMS) has at least 50 measurable objectives to determine how much UnitedHealthcare and health care professionals will be reimbursed. They have to meet these objectives to get good ratings or the CMS will pay them less money.

From Title 42 of the US government regulations…

The quality rating for a plan shall be determined according to a 5-star rating system (based on the data collected under section 1395w-22(e) of this title).

From 1395w-22(e).

Each MA [Medicare Advantage] organization shall provide for the collection, analysis and reporting of data that permits the measurement of health outcomes and other indices of quality.

Don’t be fooled, the federal government is looking for the best outcomes at the lowest cost and the health care insurance industry is doing the same thing. If a physician is spending too much money and getting crappy results compared to a physician spending less and getting better outcomes, guess what’s going to happen? Since the federal government won’t pay a reasonable rate to a health insurance company for a physician who is not getting highly rated outcomes – as defined by the federal government – the health insurance companies will not be willing to have those physicians or physician groups as a contracted provider in network.