Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa) released a majority staff report on UnitedHealth Group's (UHG) efforts to maximize Medicare Advantage (MA) profits by “turning risk adjustment into its own business and siphoning taxpayer dollars away from the program's original intent.”
As the nation's largest Medicare Advantage Organization (MAO), UHG has been under intense scrutiny in recent years. In 2024, investigative activities and reports by the Department of Health and Human Services Office of Inspector General (HHS OIG), The Wall Street Journal, and STAT News uncovered clear UHG coding abuses, prompting Senator Grassley to demand that insurance companies provide details about their billing practices.
UHG provided Senator Grassley with more than 50,000 pages of documents, including internal training materials, policies, software documentation and audit tools.
In response, UHG provided Senator Grassley with more than 50,000 pages of documents, including internal training materials, policies, software documentation and audit tools. A staff review of the records found that “UHG has transitioned from risk adjustment to a primarily profit-focused strategy.” The report released this week describes how the company used “aggressive tactics” to maximize its risk-adjustment score and obtain higher payments from the Centers for Medicare and Medicaid Services (CMS) than any of its peers. It explains, “UHG appears to be able to leverage its scale, degree of vertical integration, and data analytics capabilities to stay ahead of CMS's efforts to offset unnecessary expenses related to coding intensity.”
MA Payment and Coding Abuse
The Centers for Medicare & Medicaid Services (CMS) pays Medicare Advantage (MA) plans a set amount per enrollee, increasing payments for sicker enrollees. This is called risk adjustment, and it's an important guardrail to ensure that all people with Medicare have access to MA plans; without it, plans have a reason to avoid covering people with poorer health.
The promise of higher compensation may incentivize MA organizations to make their participants appear more serious than they actually are.
But there's a flip side: The promise of higher pay may incentivize MA organizations to make their participants appear more serious than they really are. Insurers may carefully record a patient's condition to produce a higher risk score and thus a higher payment, which is called “coding intensity.” They may also engage in “upcoding,” a fraudulent practice that simply records a paper diagnosis without actually providing more care.
Code exploitation is not a new phenomenon. The report states, “For nearly a decade, Senator Grassley has sounded the alarm on competition and gambling issues in Massachusetts.” Likewise, research has long consistently shown that MA programs inflate diagnoses, leading to an MA overpayment problem expected to exceed $1 trillion over the next 10 years. As the report also noted, “This [u]Necessary federal spending would negatively impact MA programs and U.S. taxpayers. “
Here, too, the findings are well documented. The Medicare Payment Advisory Commission (MedPAC), an independent agency that advises Congress on Medicare, estimates that CMS pays 20 percent more for MA enrollees than for similar people in Original Medicare (OM), a difference of $84 billion in 2025 alone, $40 billion of which is attributable to coding differences that increase payments to MA plans. These payments come from taxpayers, including beneficiaries, who then take a two-hit hit: Higher MA spending increases Part B premiums for all enrollees, thereby increasing Part B premiums by about $13 billion per year (equivalent to about $198 per beneficiary).
urgent need for reform
The report's conclusions underscore the need for reform:
“[T]His preliminary review revealed how UHG profited from the way CMS risk-adjusted payments were made to MAOs. The investigation also showed that MA risk adjustment has become a business in itself – but that should never be the case. Payments received by MAOs should be commensurate with the complexity and acuity of the Medicare beneficiaries they insure, not with their knowledge of coding rules and their ability to find new ways to expand diagnostic inclusion criteria. Taxpayers and patients deserve accurate and clear risk adjustment policies and processes“.
Although the purpose of MA is to reduce Medicare spending through competition and efficiency, current structural deficiencies prevent the accumulation of savings. Per capita Medicare spending is higher and growing faster for MA beneficiaries than for OM beneficiaries, and program abuse is often unchecked. The resulting overpayments generate greater profits for insurance companies, but penalize all beneficiaries by raising Part B premiums and all taxpayers by increasing costs, while weakening Medicare's financial foundation. If left uncorrected, these effects will only deepen.
Coding abuse is well documented, and CMS has meaningful (if underutilized) tools to address the problem.
Medicare Rights urges policymakers to intervene immediately, including by addressing fraud, waste and abuse within Massachusetts. Coding abuse is well documented, and CMS has meaningful (if underutilized) tools to address the problem. These common-sense reforms are non-negotiable. To ensure that beneficiaries continue to receive affordable, high-quality coverage and care, more accurate MA payments and increased insurer accountability are needed.
Learn more about Medicare Advantage history, trends and overpayments.
