government

Trump’s CMS freeze

Adobe

President Trump has put all the federal health agencies on ice until his administration staffs up. One of those agencies that shouldn’t get lost in the mix: the Centers for Medicare and Medicaid Services.

Yes, Medicare and Medicaid are still paying claims. But the $1.5 trillion agency is sitting on its hands in ways that are highly consequential. On Friday, CMS withdrew its appeal of a case in which a judge said the agency unlawfully downgraded UnitedHealth Group’s Medicare Advantage star ratings — just three days after CMS said it would appeal. 

If the Trump administration doesn’t pursue an appeal, it would secure a lucrative win for UnitedHealth, which would get higher star ratings and millions in extra taxpayer funds.

Last week, there also was a noticeable information desert. CMS’ newsroom website became barren. At the end of every day, CMS sends out notices and information about Medicare Advantage and the Part D prescription drug program. That email system hasn’t sent anything since Jan. 17. CMS also releases monthly data on Medicare Advantage enrollment. The latest data dump came on Jan. 15, but the agency retracted it due to an unidentified “issue.” CMS said it was going to publish the updated data files the week of Jan. 20, but that didn’t happen.

And for those wondering: Jeff Wu is CMS’ acting administrator while Trump’s pick, Dr. Oz, waits to get a confirmation hearing. Wu has been at the agency since 2011, focusing on the Affordable Care Act’s health plan marketplaces.

medicare advantage

Biden administration levies last-minute fines

Right before former President Biden left office, CMS got in some parting shots to a handful of the largest Medicare Advantage and prescription drug plans.

On Jan. 17, CMS fined seven companies varying amounts of money: Centene, Cigna, Elevance Health, Humana, Molina Healthcare, Baylor Scott & White, and The Carle Foundation. Centene was hit with the largest penalty ($2 million). The embarrassment of getting called out publicly probably stings more than the pocket change the companies will have to pay.

What were the violations? In each of the seven oversight letters, CMS said Medicare enrollees “may have experienced increased out-of-pocket costs” because the insurance companies messed up their own cost-sharing rules. For example, Elevance overcharged people’s coinsurance for labs, and charged people $40 for telehealth visits when they should’ve been free. The chaser: “Elevance did not ensure enrollees were refunded until after the financial audit, which was approximately two to three years after the incurred costs.”

Why did this happen? Often, insurers’ claims and processing systems stink. Sound familiar? We’ve written about it before.

spending

UnitedHealth blows past Oregon’s cost growth cap

Oregon’s health department is calling out UnitedHealth for exceeding the state’s cost growth threshold, my colleague Tara Bannow writes. 

Costs at the company’s Medicare Advantage plans spiked by 6.4% in the most recent year studied, while costs at Oregon Medical Group, a physician practice in Eugene that UnitedHealth’s Optum subsidiary acquired in 2022, increased by 6.5%.

A 2019 state law caps annual health care cost growth at 3.4% per person. In the first fiscal year the Oregon Health Authority studied (2021 to 2022), 28 insurers, hospital systems, and medical groups exceeded that threshold. Most of them, however, had acceptable reasons like longer hospital stays because of a lack of nursing home beds, while those UnitedHealth entities did not.

Starting next year, organizations that exceed the target with no acceptable reason will have to submit plans outlining steps to make health care more affordable. If they consistently fail to meet the target, the state can issue financial penalties beginning in 2026.