“Guarding Against Unnecessary Care”

The company that became UnitedHealth Group was founded in 1977 by Richard Burke, a health care analyst in Minnesota. Burke was hired by the Hennepin County Medical Society to handle claims processing for their health maintenance organization (HMO), a then-new type of insurance in which members were required to use an exclusive network of contracted providers for care to be covered.

The company quickly grew by acquiring regional HMOs across the country. In 1984, UnitedHealthcare borrowed money from the largest such group in Minnesota, a nonprofit called Physicians Health Plan. At the time, Burke was the chief executive at both operations, prompting concerns about improper influence over the loan terms and suspicions about whether the deal benefited UnitedHealthcare.

Though he stepped down as chief executive after the scandal, Burke remained on UnitedHealth Group’s board, helping to foster the company’s ambitious mergers as it sought to extend beyond traditional insurance into other health care sectors. The corporation began to wield considerable power over pricing and care delivery, raising questions about its influence on providers and suppliers.

In 2008, New York’s attorney general found that UnitedHealth Group had used data from its health care technology arm, now known as Optum, to dramatically underpay reimbursements for out-of-network medical expenses, forcing patients to absorb the costs.

A Senate report the following year found that the company was also using this database to skew market rates for medical procedures, keeping payout rates artificially low. “The result of this practice is that American consumers have paid billions of dollars for health care services that their insurance companies should have paid,” the committee found.

Since then, the company has come under repeated scrutiny for similar complaints. In 2017, the Justice Department filed two lawsuits claiming UnitedHealthcare submitted unsupported diagnoses to inflate the payments it received from the government for the plans it administered under the federal Medicare Advantage program.

Then in 2020, UnitedHealth Group purchased Change Healthcare, a large data analytics company. The $13 billion merger gave the corporation access to billions of patient claims transactions, including from other insurers.

The Department of Justice sued, pointing to previous billing irregularities and other internal company records suggesting that UnitedHealthcare intended to use this database — which half of American claims pass through — to gain an unfair advantage for its insurance business, including competitive information about its rivals.

The prosecution argued that the deal would give UnitedHealth Group a “near monopoly” on the clearinghouse market, a centralized platform where doctors, hospitals, and pharmacies process reimbursements. The agency worried this could raise costs for consumers, as it gave the company greater ability to manipulate rates.

In a previously unreported financial connection, the judge in the case, Carl Nichols of the US District Court for the District of Columbia, had sold tens of thousands of dollars of bonds in the UnitedHealth Group the year before. At the time he was considering the Justice Department lawsuit, his financial portfolio retained UnitedHealth Group holdings through several exchange-traded funds, investment vehicles that invest in a variety of stocks and other securities.

“Judge Nichols’ financial ties to UnitedHealth Group call into question his impartiality and should have prevented him from overseeing this case,” says Liz Zelnick, director of the economic security and corporate power program at Accountable.US, a nonprofit watchdog that has investigated other judiciary conflicts of interest. Federal law requires judges to recuse themselves from cases when their “impartiality might reasonably be questioned,” including specifically in situations when they have a financial interest in the subject matter.

In practice, however, many do not: a 2021 Wall Street Journal investigation found that over a hundred judges had failed to remove themselves from cases in which they might benefit, many ruling in ways that supported their financial interests. Sixty-one also traded stocks during these cases. In early 2024, the US Judicial Conference’s Committee on Codes of Conduct attempted to tighten rules around recusals, but Zelnick says, “The judiciary’s standards are too low when it comes to obvious conflicts like this.”

Nichols did not respond to requests for comment, but in his 2022 decision finding for UnitedHealth Group, he wrote that “the Government has failed to show that the proposed merger is likely to substantially lessen competition in the market.” In fact, according to the Federal Trade Commission, UnitedHealthcare’s aggressive negotiation tactics have led to higher out-of-pocket costs for patients, limiting access to care.

Nichols also agreed with the company that it already had access to much of the information provided by Change Healthcare thanks to its other holdings, citing “convincing testimony from senior executives,” including UnitedHealth Group CEO Andrew Witty.

In a July 2024 earnings call, Witty promoted the company’s successful recent acquisitions, saying the growth would “generate billions of dollars of efficiencies over the next several years.”

UnitedHealth Group did not respond to requests for comment, but in an opinion piece for the New York Times on Friday, Witty wrote, “No one would design a system like the one we have. And no one did.” He defended the company’s carefully planned and legally fortified expansion goals, adding, “We are willing to partner with anyone, as we always have.”

In Witty’s earlier eulogy for Brian Thompson, he took a different tack, reiterating that the company’s approach included “guard[ing] against . . . unnecessary care.”

“Less Waste and Lower Costs”

One of the people who found out what UnitedHealth’s definition of “unnecessary care” meant firsthand is Kathleen, whose daughter Diana was eight years old when she was diagnosed with precocious puberty, her body maturing too quickly. (Because this article discusses the medical condition of a minor, we are only using first names.) An endocrinologist prescribed a puberty-blocking treatment, a monthly injection of a drug called Lubron that would allow her to grow more consistently for her age group.

After several months of treatment, UnitedHealthcare suddenly declined to cover Diana’s next expensive injection. Despite paying for her previous shots, the company declared it didn’t cover this class of drugs. The family got a second opinion, and the next endocrinologist agreed the medication was the only thing that would allow Diana to reach a normal height. UnitedHealthcare then changed its reasoning: her daughter’s birthday was wrong. “It was absolute nonsense,” Kathleen says. “Her birthday obviously never changed.”

She and the pharmacist both spent countless hours on the phone; the shots cost thousands of dollars, and the family couldn’t afford to pay out of pocket. “I’m just so grateful that the doctor and the pharmacist fought for us,” she says. “They were as outraged as I was.” At several points, a UnitedHealthcare representative suggested noncomparable drugs with very different therapeutic effects, ignoring Diana’s doctors.

Eventually, UnitedHealthcare caved — until it denied Diana’s treatment again. “It got to be a pattern,” Kathleen says. For years, her family was trapped in a cycle: every four or five months, they’d get hit with a denial. “It was perfectly clear that this was a business decision by the insurance company, and it was an enormous amount of work to fight,” she says.

As news of UnitedHealthcare’s CEO shooting spread last week, Kathleen immediately suspected that it was someone who had suffered from similar claim denials. “I don’t condone murdering people,” she says. “However, I can understand how this happened.”

The company routinely takes advantage of its various acquisitions to find ways to boost its profits — even when that means denying care. It used its extensive databases to train and design nH Predict, for example, an algorithm that estimates how much care a patient on a Medicare Advantage plan will need after an injury or illness like a stroke. After case managers plug in information about a patient, such as their age and living situation, the program calculates the length of stay in an assisted care or rehabilitation center the patient should be entitled to.

According to a class action lawsuit, these care estimates are drastically less than patients are actually entitled to: Under Medicare Advantage Plans, patients are typically allowed up to one hundred days in a nursing home after a seventy-two-hour hospital stay. The company’s algorithm rarely approved more than fourteen days.

The estates of two deceased people filed a lawsuit in 2023 after a Stat News investigation revealed the company was overriding physicians’ determinations of what patients needed based on this AI model that the company knew had a 90 percent error rate. Former employees told Stat that the company’s focus was on keeping post-acute-care claims as short as possible. An executive was quoted in a company podcast saying, “If [people] go to a nursing home, how do we get them out as soon as possible?”

This fall, a Senate committee found UnitedHealthcare refused prior authorization requests for post-acute care like physical and occupational therapy at three times the rate that it denied other requests.

In general, the company dismissed about one in every three claims last year — the most of any major insurer and about twice the industry average. Less than 1 percent of patients appeal denied claims, meaning they pay out of pocket for the services or go without care. (ProPublica has created a guide to help people appeal denials.)

The company’s denials are likely about to increase: earlier this month, UnitedHealthcare announced a new policy allowing it to not pay for charges for services it considers “routine,” making it easier to issue “line-item denials” for things often included in larger claims, like surgical supplies and nursing care during a hospital stay.

“Too Big to Fail”

One consequence of UnitedHealth Group touching almost every aspect of the health care system is that any problems within the company’s sprawling network reverberate. In February 2024, a pharmacy technician arrived at work to find that many of her patients’ claims were being denied. (The technician asked to remain anonymous to avoid identifying the pharmacy she works for.) “We realized, ‘Oh, this is like a national outage,’” she says.

Anything related to UnitedHealthcare insurance; Change Healthcare Inc, a subsidiary revenue and payment provider that helps verify eligibility; or Optum, UnitedHealth Group’s health services company that helps with claims processing and integrates pharmacy management systems, were unavailable. That meant for over a month, the pharmacy was unable to submit any claims to Medicare. If UnitedHealth Group’s purchase of Change Healthcare had been blocked, the pharmacy might still have been able to access the systems it needed for claims processing.

The pharmacy had two choices: pay for everything they dispensed while the company couldn’t process their claims, or deny patients the care they needed. “We chose to eat the cost,” the technician says, “literally putting our business on the line for our patients.”

That was particularly maddening, she says, because “UnitedHealthcare does the opposite.” She says the company consistently puts its bottom line over providing care. She suspected that as part of cost-cutting measures, the company was behind on its updates for security measures when a ransomware cyberattack targeted Optum’s platform.

The hackers stole sensitive data, including the protected health information of 100 million people — the largest data breach ever reported in the United States. The outage severely disrupted operations for hospitals, medical offices, and pharmacies nationwide. It would take almost nine months to completely restore services. The resulting financial losses ultimately cost the company $2.87 billion — only about a tenth of UnitedHealth Group’s profits last year.

The hackers broke in using a single password on a user account that was not protected with multifactor authentication, a basic security feature. The pharmacy technician interviewed by us notes that even her small pharmacy software has very strict guidelines for features like passwords and firewalls. “You would think a billion-dollar insurance company would have better security.”

After a Senate hearing in which UnitedHealth Group’s Witty testified in May, Sen. Ron Wyden (D-OR) wrote a blistering letter to the chair of the Federal Trade Commission, explaining the attack was the direct result of corporate negligence. “It is long past time to do a comprehensive scrub of UHG’s anticompetitive practices, which likely prolonged the fallout from this hack,” Wyden said. He called for an investigation into the company, and the Department of Health and Human Services’ Office for Civil Rights started looking into whether the company was complying with federal privacy rules prior to the ransomware attack.

Even if the corporation is ultimately found liable, federal legislation limits the maximum financial penalty to $1.5 million, a pittance for a multibillion-dollar company like UnitedHealth Group. The hack, Wyden said, “is a dire warning about the consequences of ‘too big to fail’ mega-corporations gobbling up larger and larger shares of the health care system.”

The vast gap between UnitedHealth Group’s profits and the families struggling to afford their prescriptions is something the pharmacy technician who spoke to us wrestles with on a daily basis. Patients with different insurance plans can have vastly different copays or out-of-pocket costs for the same medication. UnitedHealth Group has faced criticism for charging higher prices for lifesaving insulin, for example, due to its role as a pharmacy benefit manager through its subsidiary company OptumRx.

In September, the Federal Trade Commission, which enforces antitrust law, alleged that the company implemented a rebate-driven system that favored insulin products with higher list prices, rigging the supply chain competition to force patients to pay more.

It’s not just patients who are getting stiffed by UnitedHealthcare. Even when the insurer reimburses the technician’s pharmacy, the company often doesn’t pay the full price of the drugs’ wholesale cost, forcing pharmacies to once again choose between losing money and providing care.

In a lawsuit filed in early December, a physicians’ network alleged the company has been underpaying them, too, in a pattern of “deny, delay, and underpay.” The phrase echoed what Thompson’s shooter inscribed on the bullet casings: “delay,” “deny,” and “depose.”

“Every month when we send our statements out, I dread it,” the technician says. She’s the one who has to answer the phone when patients call in, “really frustrated — and rightfully so — with their insurance just still not paying for things.”

One Person Every Seven Minutes

Now-deceased UnitedHealthcare CEO Brian Thompson knew that federal investigators suspected his company of continued wrongdoing. A 2023 lawsuit filed by the Hollywood Firefighters Pension Fund alleges that Thompson was involved in insider trading while concealing that the Department of Justice had reopened its antitrust lawsuit into UnitedHealth Group.

As the department began looking into whether UnitedHealth Group’s purchase of Change Healthcare violated the Securities Exchange Act of 1934, the suit claims top executives within the corporation hid the investigation in order to inflate the company’s stock prices. In the four months between learning about the Justice Department’s renewed efforts and when the news broke, Thompson sold $15 million of his company stock at artificially high prices, cashing in while other investors were in the dark.

None of this recent litigation seems to be slowing UnitedHealth Group down. Just last month, the Department of Justice filed yet another case, this time trying to block the company’s $3.3 billion acquisition of home health and hospice services provider Amedisys.

“We are challenging this merger because home health and hospice patients and their families experiencing some of the most difficult moments of their lives deserve affordable, high-quality care options,” said Attorney General Merrick Garland.

UnitedHealth Group’s ability to thwart antitrust regulation for decades — despite repeated lawsuits saying it inflates prices and restricts patient care — highlights the growing concentration of power within health care giants.

It’s a question of life and death for far more people than just Thompson. Some 68,000 Americans die every year because they don’t have adequate health care access, according to recent research. That’s about one person every seven minutes.

As a result, a new Lancet study found just this week that Americans are falling even farther behind the rest of the developed world when it comes to health and life expectancy. By 2050, life expectancy in the United States is expected to be only 79.9 years, a rapid decline in global rankings.

Expanding health care access is the most effective way to improve national health, noted the authors. “All Americans must have access to high-quality health care through universal health coverage,” the authors said.

In the scattershot, get-lucky-until-you-don’t system we have now, health care costs far exceed inflation, even as coverage denials surge. UnitedHealth Group may be unique in its reach, but many other major insurers operate similarly; a 2023 KFF survey found that 58 percent of people with health insurance had at least one problem with their insurer in the past year.

There are many ways to tally the costs. Some estimates suggest attempts to overturn denied claims cost health care systems $20 billion a year. Others find that over half of Americans have medical debt, even those with insurance.

But at its most basic level, the problem is that health care is not a commodity. As anyone who’s ever feared for a loved one’s care knows, it’s something we all eventually need.