At Hearing, Warren Blasts UnitedHealth CEO for Monopolistic Practices that Raise Prices, Stomp Out Competition, and Harm Patients

May 01, 2024

At Hearing, Warren Blasts UnitedHealth CEO for Monopolistic Practices that Raise Prices, Stomp Out Competition, and Harm Patients

Warren: "Because UnitedHealth has bought up every link in the healthcare chain, it's in a position to jack up prices, squeeze competitors, hide revenues, and pressure doctors to put profits ahead of patients. UnitedHealth is a monopoly on steroids."

Warren: "For the sake of our patients, our doctors and nurses, and the American taxpayer, it is time to break up the UnitedHealth monopoly."

Hearing Exchange (YouTube)

Washington, D.C. - At a hearing of the U.S. Senate Committee on Finance, U.S. Senator Elizabeth Warren (D-Mass.) questioned Andrew Witty, Chief Executive Officer for UnitedHealth Group, about how the conglomerate leverages its market power to raise prices, increase payments it receives from Medicare Advantage through tactics like upcoding, and evade federal regulations that restrict insurance company profits. The hearing comes after, earlier this week, Senator Warren wrote to the Securities and Exchange Commission regarding potential insider trading by UnitedHealth executives who were aware of this investigation before it was publicly disclosed.

Senator Warren highlighted the breadth of UnitedHealth's vertically integrated business, noting that, by revenue, UnitedHealth is the eleventh-largest company in the world. UnitedHealth owns the country's largest insurer, largest claims processor, and is the largest employer of physicians, controlling 1-in-10 doctors nationwide. Due to this web of subsidiaries, Senator Warren highlighted how UnitedHealth cheated the federal government out of $3.7 billion in 2017 due to upcoding, abusive price gouging practices in which inaccurate or unjustified diagnosis codes are added to a patient's medical chart in order to receive higher payments from taxpayers. UnitedHealth is now under investigation by the Department of Justice for its billing practices - which Mr. Witty refused to acknowledge when pressed by Senator Warren.

Senator Warren then questioned Mr. Witty on the Change Health Care cyberattack and data breach - the largest cyberattack on the health care industry in American history - and explained how UnitedHealth leveraged this crisis to acquire more practices and expand its conglomerate. Senator Warren concluded by raising concerns regarding UnitedHealth's proposed purchase of troubled Steward Health Care's physician group, Stewardship Health, pushed federal regulators to stop further acquisitions and mergers by UnitedHealth, and called for its monopoly to be broken up.

Transcript: Hacking America's Health Care: Assessing the Change Healthcare Cyber Attack and What's Next
U.S. Senate Committee on Finance
May 1, 2024

Senator Warren: Thank you, Mr. Chairman.

So, Mr. Witty in 2023, United Health Way, raked in a whopping $22 billion in profits, making you the most profitable health care company in the country, in fact, by revenue UnitedHealth is the 11th largest company in the entire world.

Now, Mr. Witty, UnitedHealth Group owns the country's largest insurer, the country's largest claims processor, the country's third largest pharmacy benefit manager, a huge pharmacy chain. It is the largest employer of physicians nationwide, or controller, with at least 90,000 physicians, as you just testified, that's about one out of every ten doctors in the country.

Is that correct about your size?

Andrew Witty, Chief Executive Officer, UnitedHealth Group, Minnetonka, MN: Uh, so just not just- thank you, Senator. The- as far as the physicians are concerned, we employ just under 10,000-

Senator Warren: Well, as I said, think you have control over about 90,000.

Mr. Witty: I would say not control. They, they choose to work with us.

Senator Warren: Okay. Great.

Because UnitedHealth has brought up - bought up - every link in the health care chain, you are now in a position to jack up prices, squeeze competitors, hide revenues, and pressure doctors to put profits ahead of patients. UnitedHealth is a monopoly on steroids.

The opportunities for, for price gouging are everywhere. For example, UnitedHealth is the biggest participant in Medicare Advantage, the government program that pays private insurers to administer Medicare benefits. With this web of subsidiaries, UnitedHealth is well positioned to rake in more taxpayer money by using a practice called "upcoding" to make enrollees look sicker. That is noticing that a patient has a cane and adding a diagnosis of vascular disease to the medical chart even if there's no clinical basis for the diagnosis, and no treatment planned.

Mr. Witty, according to a 2019 investigation by the HHS inspector general, UnitedHealth was far and away the most aggressive abuser of upcoding practices. Do you know how much, according to the inspector general, UnitedHealth cheated taxpayers out of in 2017?

Mr. Witty: Senator, thank you for the question. I'm not familiar with that particular piece of-

Senator Warren: Yeah, the number is $3.7 billion.

And that's in just a single year. And that's from only two upcoding practices.

You know, that was five years ago. Now, as we speak, is UnitedHealth under investigation from the DOJ for, among other things, your billing practices?

Mr. Witty: Senator, thank you for your question. We have a long-standing practice of not commenting on matters such as that or things like mergers and acquisitions-

Senator Warren: Now, well I understand why you might not want to comment on it. Public reporting from the Wall Street Journal confirms that it is- although your company has not disclosed this investigation.

In fact, yesterday I sent the SEC a letter raising concerns about over $100 million in stock sales that UnitedHealth executives made in the days and weeks before the investigation was revealed by the press- and I'd like to make that part of the hearing record if I can, Mr. Chairman.

Chairman Wyden: Without objection, so ordered.

Senator Warren: Okay.

So, UnitedHealth is huge and it boosts its multibillion dollar profits with, among other things, illegal billing tactics. And that takes me to the data breach. After the largest cyber attack on the health care industry in American history, quote, "put hundreds of thousands of health care providers at risk of collapse." UnitedHealth is now using the crisis to expand its monopoly even further.

For example, in Oregon, United Health tried to purchase a local physician practice, but faced enormous public opposition. After the data breach that we're talking about today, these doctors couldn't get reimbursed for their services, which pushes them to the financial breach.

So, what did UnitedHealth do? They filed an emergency petition with regulators to allow them to acquire the doctor's practice on an expedited basis. Mr. Witty, will this acquisition make UnitedHealth even bigger?

Mr. Witty: Senator, thank you for your question. I'd just like to also put on the record that we as an organization-

Senator Warren: I had a very simple question: Will it make UnitedHealth - this giant, this 11th largest company in the entire world - even bigger?

Mr. Witty: As new organizations join us, the organization, I hope, becomes better as new physicians-

Senator Warren: The question is not "better." We've already talked about your business practices. The question is "bigger," will it make UnitedHealth bigger?

Mr. Witty: As we grow, we become larger, yes.

Senator Warren: Yeah. Okay.

So, you know, United Health is using its own data breach to snap up doctors practices that have been driven to the edge of bankruptcy by that same data breach.

It's no wonder that UnitedHealth told its shareholders that this data breach would have, quote, "no material impact" on the company's finances.

UnitedHealth will stop at nothing to grow bigger, bigger and bigger. As we speak, UnitedHealth is trying to pick the bones of Steward Health Care in my home state of Massachusetts, which was ruined by private equity and corporate greed.

It is time for regulators to say no to these efforts to get bigger and to suck even more health dollars away from patients and providers who need it.

For the sake of our patients, our doctors and nurses, and the American taxpayer, it is time to break up the UnitedHealth monopoly.

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