UnitedHealth's headquarters in Minnetonka, Minnesota. Credit: wolterke/Adobe Stock;
UnitedHealth Group allegedly made secret bonus payments to nursing homes to cut costs by reducing hospital transfers, according to an investigation by The Guardian.
The insurance giant offered nursing homes financial rewards through an incentive program that prevented some residents from receiving critical care at hospitals, the report said. These payments have saved the company millions of dollars but at times have risked the health of residents.
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This was only the latest development in a tumultuous past year for the company that includes a damaging cyberattack last summer, the murder of a company executive in December, federal investigations, multiple ongoing lawsuits and falling share prices.
The report was based on reviews of patient and corporate records and interviews with former nursing home and UnitedHealth employees. Under the alleged scenario, UnitedHealth placed its own medical teams in nursing homes and urged them to reduce care expenses for residents it insured. Residents who needed immediate hospital care at times failed to receive it following interventions from UnitedHealth staff members. At least one person lived with permanent brain damage following his delayed transfer.
“In several cases identified by The Guardian, UnitedHealth’s insertion of itself into nursing home emergency protocols helped delay or avert transfers for patients who could have benefited from immediate hospital care,” the investigation said. “Over the past seven years, the company has shelled out ‘Premium Dividend’ and ‘Shared Savings’ payments that boosted nursing homes’ bottom lines. Through its ‘Quality and Shared Risk’ program, UnitedHealth offered an even bigger cut to nursing homes that drove down medical spending but threatened to claw back money from those that didn’t.”
Related: UnitedHealth now facing a 401(k) class action suit, as employees sue for misuse of forfeited funds
As part of the Premium Dividend program, UnitedHealth tracked admits per thousand, or APK, which is the rate at which facilities sent residents to the hospital. A low APK qualified a nursing home for bonus payments, while a high APK disqualified it.
“APK drove everything,” a former company executive said. “You gain profitability by denying care, and when profitability suffers for the shareholders, that’s when people get crazy and do things that are not appropriate.”
UnitedHealth countered that the charge that its employees have prevented hospital transfers “is verifiably false.”
“The U.S. Department of Justice investigated these allegations, interviewed witnesses and obtained thousands of documents that demonstrated the significant factual inaccuracies in the allegations,” it said in a statement. “After reviewing all the evidence during its multiyear investigation, the Department of Justice declined to pursue the matter.”
Meanwhile, UnitedHealth Group shares slid in recent trading after the story broke and as investors expressed concern about potential cuts to Medicaid and Medicare. Since reaching their April high, company shares have lost about half their value.
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
