Hospitals during the third quarter continued what Chief Financial Officer John Rex called “extreme” coding actions, where some medical centers are categorizing patient visits in ways that increase reimbursement. Rex first called out these actions when discussing second quarter results in July.
“Certain entities have been notably and persistently aggressive, having upshifted their coding intensity factors by more than 20 percent,” Rex said. “We are actively addressing this unnecessary additional cost burden to the health system.”
The company also is having problems with the revenue it receives for running managed care health plans in Medicaid, the state and federal health insurance program for lower-income Americans and people with disabilities.
Over the past year, states have been re-determining eligibility for beneficiaries, a process that’s resulted in many healthier enrollees losing coverage. This means the remaining population is using more services on average, UnitedHealthcare says, but payment rates to the company’s health plans are still based on the lower utilization of the past.
A final factor, Rex said, is the federal Inflation Reduction Act, which next year is eliminating co-insurance payments from Medicare patients during what’s called the “catastrophic phase” of Part D medication benefits. UnitedHealthcare anticipated that this change would increase use of costly drugs next year, Rex said, but the company started seeing the effects during the third quarter.
There was a “rather rapid acceleration in the prescribing of certain high cost specialty medications,” Rex said, “primarily those used to treat cardiovascular disease, autoimmune disorders and cancer.”
