As policymakers battle over ill-advised and harmful cuts to Medicaid and other public programs, Medicare Advantage plans face warranted but long-overdue scrutiny
Recent Administration Actions re: Medicare Advantage
During the first Trump Administration, the Medicare Advantage program was favored over traditional Medicare, both in Medicare’s own materials and in policy. While the second Trump Administration is just a few months old, its approach to Medicare and Medicare Advantage (MA) is still taking shape. On the one hand, in its first significant MA policy updates, it increased MA payment without taking measures to account for rampant upcoding, such as increasing the minimum coding intensity adjustment. The Administration also failed to finalize some key consumer protections and plan oversight provisions in the final CY2026 Part C & D rule issued in April 2025. In addition, as addressed in a joint op-ed with the Center for American Progress, there are persistent indications that the administration is working on policies that could make Medicare Advantage, rather than traditional Medicare, the default enrollment for new Medicare beneficiaries – a policy that would greatly accelerate the privatization of the Medicare program.
On the other hand, there appears to be increased scrutiny of Medicare Advantage by the new administration. Perhaps this is because as Medicare becomes more privatized and more people are in MA plans, overpayments and barriers to accessing care are harder to ignore. For example, CMS announced that it will be expanding its audit efforts for MA plans. In a recent press release, CMS stated that “Beginning immediately, CMS will audit all eligible MA contracts for each payment year in all newly initiated audits and invest additional resources to expedite the completion of audits for payment years 2018 through 2024.” As noted by STAT News in an article by Bob Herman (May 21, 2025), this effort builds on a Biden Administration rule from 2023 that “finalized the structure of these audits — known as risk adjustment data validation, or RADV.”
In addition, STAT News notes that in a lawsuit challenging the audit rule filed by Humana, the Department of Justice (DOJ) “has continued to defend the auditing rule and asked a judge in March to throw out the lawsuit.” As outlined further below, DOJ has both maintained involvement in pre-existing MA-related suits and taken new actions against MA plans.
Scrutiny of UnitedHealth Intensifies
On May 15, 2025, the Wall Street Journal published an article titled “UnitedHealth Group Is Under Criminal Investigation for Possible Medicare Fraud” by Christopher Weaver and Anna Wilde Mathews wherein they report that the Department of Justice (DOJ) is “investigating UnitedHealth Group for possible criminal Medicare fraud” and “[w]hile the exact nature of the potential criminal allegations […] is unclear” sources indicate that “the federal investigation is focusing on the company’s Medicare Advantage business practices.”
The article notes that the “criminal probe adds to a list of government inquiries into the company, including investigations of potential antitrust violations and a civil investigation of its Medicare billing practices, including at its doctors offices.” Noting that DOJ has “struggled to make its case in fraud claims against UnitedHealth in the past”, the article describes a civil case brought by a whistleblower in 2011 and joined by the government in 2017 “concern[ing] claims that UnitedHealth submitted $2 billion worth of diagnoses recorded by doctors that its own reviewers determined weren’t supported by patients’ medical charts.” The reporters state that:
In March, a court-appointed special master recommended that a judge effectively dismiss a whistleblower case against UnitedHealth after concluding the government hadn’t presented evidence that patient diagnoses submitted for payment were inaccurate. The judge in the case hasn’t yet ruled on the recommendation.
As reported by STAT News in an article titled “House Democrats urge judge to advance UnitedHealth Medicare fraud case to trial” by Bob Herman (May 16, 2025), “[t]wenty-eight Democratic members of the House of Representatives are backing the Department of Justice’s case that alleges UnitedHealth Group committed widespread Medicare Advantage fraud by not eliminating unnecessary diagnosis codes of its members.” In an amicus brief filed with the court, the lawmakers “urged the federal judge overseeing the case to reject a March recommendation from a special master to dismiss the case, and asked the judge in a legal filing to ‘allow this case to proceed to jury trial in a public courtroom’” (also see a press release issued by Rep. Pramila Jayapal, who led the amicus brief effort).
Apparently unrelated to any existing litigation, an investigation by The Guardian has exposed additional alleged misconduct by UnitedHealth. A recent article published by The Guardian titled “Revealed: UnitedHealth secretly paid nursing homes to reduce hospital transfers” by George Joseph (May 21, 2025) opens as follows:
UnitedHealth Group, the nation’s largest healthcare conglomerate, has secretly paid nursing homes thousands in bonuses to help slash hospital transfers for ailing residents – part of a series of cost-cutting tactics that has saved the company millions, but at times risked residents’ health, a Guardian investigation has found.
Those secret bonuses have been paid out as part of a UnitedHealth program that stations the company’s own medical teams in nursing homes and pushes them to cut care expenses for residents covered by the insurance giant.
In several cases identified by the Guardian, nursing home residents who needed immediate hospital care under the program failed to receive it, after interventions from UnitedHealth staffers. At least one lived with permanent brain damage following his delayed transfer, according to a confidential nursing home incident log, recordings and photo evidence.
Meanwhile, Becker’s Payer Issues reports in a recent article by Rylee Wilson that “UnitedHealth Group is asking shareholders to support a $60 million stock option award for its new CEO.”
DOJ Suit Targeting MA Kickbacks to Brokers
The Department of Justice recently filed another Medicare Advantage-related suit, this time against several plan sponsors other than UnitedHealth. A recent KFF Health News article titled “Trump’s DOJ Accuses Medicare Advantage Insurers of Paying ‘Kickbacks’ for Primo Customers” by Julie Appleby (May 19, 2025) states that:
Now a blockbuster lawsuit filed May 1 by the federal Department of Justice alleges that insurers Aetna, Elevance Health (formerly Anthem), and Humana paid “hundreds of millions of dollars in kickbacks” to large insurance brokerages — eHealth, GoHealth, and SelectQuote. The payments, made from 2016 to at least 2021, were incentives to steer patients into the insurer’s Medicare Advantage plans, the lawsuit alleges, while also discouraging enrollment of potentially more costly disabled beneficiaries.
The article goes on to highlight some of the harms experienced by beneficiaries as a result of these practices:
The filing, which alleges violations under the federal False Claims Act, outlines some of the problems consumers could face because of those payments, including being enrolled or switched into plans without their express permission, and getting coverage that didn’t meet their needs.
While MA plans have an incentive to make their enrollees appear as sick as possible in order to maximize risk adjusted payment (a practice known as “upcoding”), the DOJ suit alleges disturbing efforts to exclude people who might be more costly to the plans. Appleby notes:
Meanwhile, people with disabilities looking to enroll in private-sector Medicare Advantage plans had their calls ignored or rerouted by systems designed to weed out disabled people, especially if they were under age 65, the lawsuit alleges. That’s because the insurers knew that disabled beneficiaries usually cost more to cover than those without medical problems, the case alleges. Medicare plans are not allowed to discriminate against people with disabilities.
The article also quotes CMA and others about how the pay structure of commissions “creates an uneven playing field between the private-sector plans” and traditional Medicare. This inequity in payment and incentives is exemplified by a recent announcement by UnitedHealth. A recent article in Modern HealthCare titled “UnitedHealth Group to cut Medicare drug plan commissions” by Nona Tepper (May 15, 2025) notes that “UnitedHealth Group plans to stop paying commissions next month to brokers and sales agents who sell new Medicare Part D prescription drug plans.” The article goes on to note that:
By cutting Part D marketer commissions, UnitedHealthcare is following in the footsteps of competitors likeCVS Health subsidiary Aetna and Centene. UnitedHealthcare counted 2.8 million Medicare Part D enrollees as of March 31, down 8.1% from the same time last year, according to its first-quarter earnings report. It sells Medicare Part D plans under the AARP brand name.
As discussed in a CMA Alert last year (Sept. 5, 2024), which references a 2023 Commonwealth Fund report, the fact that both insurance companies and agents/brokers selling their products earn much more from MA than they do from Part D disincentivizes enrollment in stand-along part D plans, and further favors MA enrollment over traditional Medicare.
Statement from GOP Doctors’ Caucus on MA
Reps. Greg Murphy, M.D. (R-N.C.) and John Joyce, M.D. (R-Penn.), Co-chairs of the GOP Doctors’ Caucus, recently wrote an op-ed published in the Washington Times titled “This is our prescription to fix a broken health care system” (May 20, 2025). The portion of the op-ed focusing on MA is excerpted here:
Medicare Advantage Reform
Insurance companies are playing games with their own customers’ health for record-breaking profits. Medicare Advantage (MA) was created with the premise of providing wrap-around services for seniors at lower costs. Unfortunately, profit-driven insurance companies have destroyed that model. While MA continues to provide important benefits to millions of seniors, these plans must stop seeing rewards for delaying or altogether denying care to beneficiaries that need it. Even worse, insurance companies that provide MA plans “upcode” beneficiaries with diagnoses that are clinically irrelevant and often dangerous. Despite the goal of saving money through better preventive care, evidence indicates these plans currently cost taxpayers up to 20% more than traditional fee-for-service, without better outcomes. Stopping these unfair and unethical practices will mean better healthcare now and protecting Medicare benefits for the future.
Conclusion
The current efforts by Congress and the Administration to gut Medicaid and other critical public programs is unacceptable, and must be stopped. At the same time, some of these same actors are more visibly and vocally calling out and trying to address some of the problems inherent in the Medicare Advantage program. Long-overdue and so far insufficient actions to rein in Medicare Advantage abuses against their own enrollees as well as the public’s dollars do not outweigh or compensate for the overall dangers of a further privatized Medicare program. We call on policymakers to protect the traditional Medicare program, Medicaid, the Affordable Care Act, and other pathways to health coverage, while at the same time ramping up oversight and accountability of private insurance plans as long as they part of these programs.
May 22, 2025 – D. Lipschutz