I had to laugh as somewhere else on the web I read a title of “United embraces Obamacare”, well heck they practically run it so at this point embrace is a funny description to me.  We all know that the company lives off constant business intelligence algorithms that dissect each operating area of the company, along with subsidiary actions as well.  Sometimes it’s hard to see what a subsidiary is contributing to the bottom line as they are located under a few tiers of the massive complex structure.  The SEC filings will give you a good idea to where most of them are.  Of course the company would want to see Medicaid expanded as that means more money and revenue. 

Total member ship declined, and in California at the end of last year they pulled out of the individual policy business all together and rely mostly on their Medicare Advantage and Medicaid contracts along with employer insurance revenues.  In one area their networks were so narrow that United bid and won a contract, but had to give it back as they had no providers for the Medicare Advantage business.  Recently in California United found they had no in network Urgent Care Centers and that presented a small lawsuit as well as a suit for refusing to pay for lap band surgery.  In other states such as Texas United aka Optum is building their own Urgent Care centers that are branded, maybe right across from hospital ERs:)

Their drug business was up as Optum RX, formerly known as Prescriptive Solutions grew 23% and a bit of this was due to replacing Express Scripts in for member drug benefits.  In addition, it looks like the company is growing their “hospice for profit” group with adding new facilities.  To me this is a strange item to have a hospice company owned by an insurer as there are other for profit companies but they are not owned by an insurance company.

Optum/United Healthcare Opening New Hospice Care Facilities In Birmingham & Macon, Hospice For Profit-Evercare Subsidiary to Gets Rebranded To Optum Palliative and Hospice Care

In addition this week in California we have United suing the State of California over botched up issues that go back to the purchase of PacifiCare, the one where they gave the former CEO a new as a parting gift.  With all their lawsuits, the company a couple years ago hired the former Assistant US Attorney in Minnesota as their general counsel. 

United Healthcare Files Legal Suit Against State of California - Stemming Back to PacifiCare Acquisition

Also in California doctors don’t get a break on the new “doctor rating” analytics and of course we know this is done to reduce payments to doctors and most that I talk to in the OC area tell me due to complex contracts they have to sign to be in network, their net pay from United is less than what Medicare pays. 

CMA Asks United Healthcare in California To Delay Premium Designation Program With “Scoring” Doctors for A Few Months, But “No Give”, Its Starting in August, Algorithm Says…

In addition we now have a former United Executive as the number 2 person at CMS who was a former CEO for the old Ingenix technology end of United Healthcare who was there during the time of the settlement of the big AMA class action lawsuit to where the company and other insurers who licensed their data base formulas and paid doctors and patients short for 15 years.  It’s one of those things that make you say hmmm, but anyway a former CMS employee somewhat told me that then they need numbers and studies, one division of United or another has been there to help them with their reports over the last few years as well.  In addition there’s more potential legal woes again with the same or related issues once again with claim payments in New York being under-reimbursed as what was settled in the AMA lawsuit a few years back.

Law Firm Investigating UnitedHealthCare Claim Payments in New York Stating Under-Reimbursement By Manipulating Algorithmic Benefit Calculations…

I don’t know how this happened but if one is the wife of a banker in New York, I guess the out of network payments are pretty good as a check rolled right out for over $175,000 for a hammer toe procedure a couple months ago. 

It is kind of scary as you do wonder if we are now building “insurers too big to fail” as if you visit the page with their SEC filings, you’ll find quite a bit and that doesn’t even include all subsidiaries that are not considered “significant” by SEC rules or those to where a subsidiary, such as Monarch as an example has a 51% controlling interest in other companies.  I still the company maintains the largest derivatives fine on record from the government going back to 2008. 

How Hard Did United Have to Lobby To Get Someone In The Deputy Administrator Job at CMS? Sebelius Syndrome Lives On With Burwell, In Good Company With Mary Jo White and Richard Cordray To Name A Couple Others…

When you see reports like this from the company about telling the government to aggressively manage medical care, does this mean we want more government contracts too?  In addition the company has a military division that works to either manage or acquire more government contractors, such as LHI for one that provide services to both the DOD and VA. 

United HealthCare Issues Another Study, This One Telling Government To Aggressively Manage Medical Care For Seniors-An Area Where A Large Chunk of Their Revenue Comes From Today, Managing Care

Also there’s the low income housing project investments that continue to grow with the company and we still have the old Lewin subsidiary of United kicking out reports and studies, one here for HUD and HHS so they can get more data on the health of the folks in HUD housing, so they make money going to the bottom line with these types of efforts and why this is needed I don’t know by all means. 

At the Optum Labs division where McLaren Health system and Mayo send their medical records for data mining, there’s now a paying customer, Boston Scientific to mine and look for data in the patient EMR files to gain insight into their product performance.  AARP became a supporting partner of the Labs too and what they do, I don’t know other than maybe talk folks who have a PHR with them to share with Optum labs?  That’s just a guess so I really have no clue in putting that relationship together. 

There was another purchase or I should say 90% I think of a another data mining company by United, Audax which does gamification stuff to get you to enter your data and have fun while they mine it.  In addition there’s the issues of United firing a lot of doctors who take care of Medicare Advantage patients too and that’s not going over real well.

US Appeals Court Refuses Interim Stay Requested By United Healthcare In Connecticut & Refers Matter to 3 Judge Panel While Other State Medical Boards (California and Texas to name 2) Signed On To The Brief To Support The Connecticut State Medical Society

The company hopes to earn money supporting major EMR vendors as they advertise they want to be the Integrators, you know kind of like the jobs they are doing for HHS in overseeing all the website work for the insurance exchanges.  Cerner a few years ago licensed the then called Ingenix Revenue Cycling software so I assume the company makes some licensing money there too every time a Cerner system is sold and revenue cycling comes with it. 

United Healthcare (Optum Insight Subsidiary) Wants To Be Your Allscripts, Epic And GE Centricity EHR Consulting Service Starting With Implementation And Beyond

I don’t know how much revenue is coming from the cheap hearing aids.  Lawsuits may be tougher ahead as last year United lost after fighting for years a case where the company wanted to maintain that doctors could not collaborate to litigate with insurers but the Supreme Court told them they could do that anymore so now it’s not just one doctor up against a corporation any longer.  Again staying under the radar with subsidiaries  that are tiered, people just may not realize they are doing business with a United/Optum entity and they all put money to the bottom line.  That makes it easier to entertain selling insurance in more states and I understand that 2/3 of the company profits come from the insurance end of their business and 1/3 comes from Optum the tech/analytics/software and data selling side of the company. Link below has a bunch of links to their various businesses and that’s how they make money.  BD

Health Insurance Business Under the Radar With Tiered Subsidiaries–Where All the Action Takes Place With Mergers, Acquisitions and Profit Centers-Subsidiary Watch

The overhaul also is helping UnitedHealth outside the public exchanges. The insurer said Thursday that its Medicaid enrollment jumped nearly 19 percent to about 4.7 million people compared with last year’s quarter. About half of that growth came from Medicaid coverage expansions called for in the law.UnitedHealth Group said Thursday that it will participate in as many as 24 of the law’s individual health insurance exchanges in 2015, up from only four this year.

Medicaid is the state-federal program that covers the poor and elderly people. States hire insurers to administer the coverage.

To be sure, major insurers don’t see the overhaul as a pure growth driver. The customers they gain from the law known as the Affordable Care Act generally make up a small slice of their overall business. The Medicaid business that UnitedHealth added also delivers a thinner profit than private coverage.



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