5 Things to Know About UnitedHealth's Cut of Medicare Advantage Providers

UnitedHealth Group has been eliminating physicians from its provider networks for Medicare Advantage plans across the nation to help control costs, and it is a trend that is set to continue.

Here are five things to know about the cuts:

1. UnitedHealth is the country's largest provider of privately managed Medicare Advantage plans, and the company has cut thousands of providers in its Medicare Advantage networks in states across the country, including Alabama, Connecticut, Florida, Georgia, Massachusetts, Missouri, North Carolina, Rhode Island and Tennessee.

2. In December 2013, UnitedHealth attributed its decision to narrow Medicare Advantage plan provider networks on "an era of Medicare Advantage funding cuts," according to a report from The Hill. For the entire 2013 fiscal year, UnitedHealth brought in $122.5 billion in revenue, up 10.7 percent from 2012, while earnings rose 1.8 percent to $5.63 billion. However, during the first quarter of 2014 the company's net earnings fell 7.8 percent, from approximately $1.2 billion in 2013 to $1.1 billion this year. UnitedHealth's financial growth was "offset by headwinds from new [PPACA] taxes and Medicare Advantage funding deficiencies," said Stephen J. Hemsley, president and CEO of UnitedHealth in a news release.

3. In Massachusetts, UnitedHealth plans to cut up to 700 physicians in its Medicare Advantage network, effective Sept.1. The company said it will not be dropping any hospitals from it Massachusetts coverage, as it has controversially done in other states. In Connecticut, UnitedHealth dropped roughly 2,200 physicians from its Medicare Advantage network last fall, which led to two physician groups filing a lawsuit against the insurer.

4. In April, UnitedHealth cut almost 100 physicians from its Medicare Advantage network in Missouri, and in July the insurer announced it will make further cuts in the state beginning in September. UnitedHealth told St. Louis Today that the main factors for the change were the health industry's move toward quality over quantity and a closer collaboration between payers and physicians.

5. In July, legislation that would prevent Medicare Advantage plans from dropping providers in the middle of the year was introduced in Congress. Sens. Sherrod Brown (D-Ohio), Richard Blumenthal (D-Conn.) and Rep. Rosa DeLauro (D-Conn.) introduced the The Medicare Advantage Participant Bill of Rights Act, which would require Medicare Advantage plans to finalize their provider lists 60 days before the annual enrollment period.

Rep. DeLauro announced her intention to introduce the bill in April in response to  UnitedHealth's move to cut thousands of providers from its Medicare Advantage networks at the end of 2013. "The timing and scale of UnitedHealth Group's provider cuts have been extremely disruptive to patient care and put participants at risk," said Rep. DeLauro, in a news release. "We have a responsibility to ensure Medicare Advantage plans are serving the needs of their participants." Sen. Blumenthal's decision to introduce the legislation was also partially prompted by UnitedHealthcare. "Our experience with UnitedHealthcare Group — unconscionably dropping hundreds of physicians — provides powerful evidence for this stronger protection," said Sen. Blumehthal in a news release.

More Articles on Medicare Advantage:

Tenet, Humana Launch ACO for Medicare Advantage Members 
Legislation Introduced Imposing Restrictions on Medicare Advantage Plans 
Humana Under Investigation For Allegedly Overcharging Medicare Advantage Program