Doggett, Murphy Call for Independent Investigation into Medicare Advantage Organizations
Contact: Alexis.Torres@mail.house.gov
Washington, D.C.—Today, Ways and Means Health Subcommittee Ranking Member Lloyd Doggett (D-TX) and Health Subcommittee member Greg Murphy, M.D. (R-NC) made a bipartisan request to the Government Accountability Office (GAO) for a detailed investigation and report on the vertical consolidation of Medicare Advantage Organizations (MAO) and its effect on Medical Loss Ratio (MLR) calculations.
“The acquisition of related businesses such as health care providers by MAOs could undermine the effectiveness of MLR requirements. A recent study suggested that MAOs may be able to circumvent MLR requirements through payments for medical expenses to related businesses such as health care providers,” wrote the Members. “This is because payments to a related business are considered medical expenses for purposes of calculating the MLR, even though a portion of these payments may ultimately be profits for the MAO. MAOs’ provider acquisitions in recent years further increase the potential for MAOs to circumvent MLR requirements in this manner.”
As MAOs continue to rapidly purchase surgery centers, primary care practices, home health agencies, pharmacy benefit managers, health technology firms, and more, there must be accountability for the hundreds of billions of taxpayer dollars paid to these organizations, including tens of billions of wasteful overpayments. For example, UnitedHealth Group is now the nation’s largest insurer and the largest employer of physicians. These ownership structures may also create perverse incentives for physicians to add unsupported diagnoses codes to medical charts, refer patients to commonly owned providers and pharmacies, and other potentially fraudulent, wasteful, and abusive practices.
The Members' request specifically seeks a detailed investigation of the payments and trends in vertically consolidated MAOs, including any differentiated treatment of owned vs. independent businesses and providers.
The full letter can be viewed here.