In response to the rise of United Health Group and other Medicare Advantage Organizations’ (MAOs) adding provider groups and pharmacies to their lines of business last week, House Ways and Means Health Care Subcommittee Ranking Member Lloyd Doggett (D-TX) and Health Subcommittee member Greg Murphy, M.D. (R-NC) sent a letter to the Government Accountability Office (GAO) seeking an investigation and report on these vertically integrated arrangements and their impact on the MAOs ability to meet their minimum medical loss ratios requirements.

Essentially, the question is are MAOs making payments to these related businesses as a way to meet their medical loss ratio (MLR) requirements instead of actually paying for services?

The Centers for Medicare and Medicaid Services (CMS) recently posed a similar question and proposed a change to the MLR requirements in the Calendar Year 2026 Medicare Advantage (MA) policy and technical rule that would prevent these types of payments to providers except in circumstances where it could be shown that the payment was related to health outcomes for their enrollees. This provision, however, was not finalized by the Trump Administration.

It has been alleged that some vertically integrated MAOs just write out checks to their owned providers if it looks they won’t have enough expenses to report as medical costs at the end of the year. If MA plans don’t spend 85% of MA plan premiums on medical care, they are required to pay back the difference to whomever pays the premiums; they are prohibited from enrolling new members into their plan; and they can have their contract terminated.  Some members of Congress are also interested in shutting down these practices and limiting vertical integration.

LeadingAge will watch these developments related to MA plan vertical integration closely for not only the outcome of the report but also for any proposed policies, both in Congress or from the Trump administration, that might limit these practices, as such policy changes could inadvertently apply to LeadingAge members who run their own institutional Special Needs Plans or other similar MA plans.