Latest news with #OptumRx
American Military News
2 days ago
- Business
- American Military News
In first speech back, UnitedHealth's new CEO pledges to review hot-button issues
Newly back in the CEO chair at UnitedHealth Group, Stephen Hemsley on Monday vowed to address a series of lightning-rod issues that have heightened public scrutiny of the company. That includes fresh reviews of the Eden Prairie company's pharmacy business, the way it scores Medicare patients' health risks and its care management practices. But Hemsley, the longtime executive who resumed his role as CEO last month, kept his cards close to the vest during the company's annual meeting Monday, offering almost no specifics about the new reviews. He also apologized for recent financial missteps that have shocked investors and prompted an unprecedented decline in UnitedHealth Group's share price. 'Importantly, I'm returning to the company with a fresh perspective on some of the most publicly discussed matters,' Hemsley said. 'I'm introducing new initiatives to include a comprehensive review of all our policies, our practices, and the associated processes and performance measures for risk assessment coding, for managed care practices and for pharmacy services. We will use authoritative independent experts to evaluate and assess these reviews, and we'll modify our approaches where appropriate.' A former top physician executive with UnitedHealth told the Minnesota Star Tribune last month that addressing reputational hits likely would be a top priority for Hemsley, who is replacing previous CEO Andrew Witty. Witty remains with the company as senior advisor after stepping down for personal reasons following uncharacteristic financial missteps. The company's share price has plummeted in recent months. UnitedHealth Group is parent company to UnitedHealthcare, the nation's largest health insurer, and a large pharmacy benefit manager (PBM) called Optum Rx. A federal watchdog report last year found UnitedHealth Group stood out from its peers in using questionable diagnosis data to boost payments in Medicare Advantage, a privatized version of the federal government health insurance program for seniors. And Optum Rx has been caught up in Federal Trade Commission scrutiny of the PBM industry. Since the Dec. 4 killing of company executive Brian Thompson, UnitedHealth has been at the center of public discussion over health insurance denials, although Hemsley did not directly address that issue in his remarks Monday. The company did not specify what he meant by 'managed care practices.' In a Q&A period during Monday's event, one shareholder asked UnitedHealth to provide specific data on the factors used by the company's artificial intelligence technology to override decisions from physicians and health care providers. That premise was immediately rejected by Dr. Wyatt Decker, a former Mayo Clinic executive who is the chief physician for value-based care at UnitedHealth Group. 'We do not use AI to deny care or tell our doctors or nurse practitioners how to practice,' Decker said. 'We believe that there's a terrific future for health care when providers are supported by smart systems that can put pressing needs and suggestions in front of them — frankly at their fingertips — and we are on the front edge of that technology with decision support for our physicians.' A patient lawsuit is moving forward in the U.S. District Court of Minnesota where plaintiffs allege UnitedHealthcare has used a faulty artificial intelligence program to deny coverage for post-acute care needed by Medicare patients. UnitedHealth says the lawsuit is based on unfounded allegations and mischaracterizes the work of its clinicians. Hemsley opened his annual meeting remarks by apologizing for the company's recent financial performance and pledging to shareholders that UnitedHealth would 'earn back your trust and your confidence.' The company had a stellar reputation on Wall Street for growth and profitability during Hemsley's first stint as CEO, from 2006 through 2017. At that point, he graduated to the position of board chairman, a job he still holds today. Going forward, the most immediate area of focus is 'pricing discipline,' Hemsley said. 'Clearly we have gotten things wrong,' he said. 'We underestimated care activity and cost trends and generated outsized growth. We are intensively examining our approaches and have already begun to make improvements, including, most notably, a significant retooling of our efforts to ensure more precise and more accurate forecasting of both care and financial activity.' Last month, UnitedHealth Group suspended financial guidance for the year due in part to unexpected costs in Medicare Advantage as well as the company's Optum Health clinics that care for seniors. Hemsley said the company would issue new guidance with the release of second quarter results on July 29. 'Across the enterprise, our pricing decisions and benefit designs for the next year are being fully shaped with an abundance of respect for the trend factors we noted in May and the environment we find ourselves in today and see going forward,' Hemsley said. In recent weeks, the company has been making changes in management teams and processes to ensure it has the right leadership in place going forward, Hemsley said. He added that UnitedHealth this week is submitting bids to the federal government for 2026 work that reflects 'our elevated care activity experience' in Medicare Advantage. 'It has never been more evident to me that we need to reinvigorate the performance culture and disciplines that have long been the hallmark of this company to more effectively navigate through this dynamic period.' ___ © 2025 The Minnesota Star Tribune. Distributed by Tribune Content Agency, LLC.
Globe and Mail
3 days ago
- Business
- Globe and Mail
UnitedHealth (UNH) CEO Hemsley Vows Cost Controls as Q1 Earnings Fall Short
UnitedHealth's (UNH) new CEO, Steve Hemsley, opened his tenure by apologizing for the company's first earnings miss since 2008, pledging to restore shareholder confidence and address rising care costs. Hemsley replaced Andrew Witty after the first-quarter shortfall, which was driven by unexpectedly high costs in the Medicare Advantage unit, prompting a suspension of the 2025 guidance as UnitedHealth recalibrated its financial outlook. Market Overview: UnitedHealth missed first-quarter earnings estimates for the first time since 2008 Medicare Advantage costs rose above forecast, leading to suspension of 2025 guidance Optum Rx pharmacy benefit manager and UnitedHealthcare insurer units faced higher-than-expected care costs Key Points: Hemsley committed to incorporating elevated care-cost assumptions into future pricing Company will review forecasting models and risk metrics across all business units Optum Rx and UnitedHealthcare divisions to undergo a comprehensive audit of practices Looking Ahead: Investors will watch for more accurate guidance tied to real medical-cost trends Execution of cost-control measures and transparent reporting will be critical to restoring confidence Containment of Medicare Advantage losses will determine near-term profitability and trust Bull Case: The return of Stephen Hemsley as CEO brings experienced leadership to UnitedHealth. Hemsley previously led the company from 2006 to 2017 and has a deep understanding of its operations. He has pledged to earn back shareholder trust and optimize quality in its health services. Hemsley has initiated a comprehensive review of all company policies, practices, and performance measures, including controversial areas like Medicare Advantage risk adjustment and pharmacy benefits management. This review will involve independent experts, and approaches will be modified where appropriate. The company plans to factor in higher care costs into its private insurance plans and next year's Medicare Advantage plans, which could help stabilize margins in the future. Despite recent setbacks, UnitedHealth has a history of resilience and delivering long-term value to shareholders, as evidenced by a total shareholder return of nearly 16% over the past five years. Hemsley expressed optimism about the company's future, stating that many of the issues are within UnitedHealth's control and capacity to resolve. Bear Case: UnitedHealth reported its first earnings miss since 2008 in the first quarter, driven by unexpectedly high medical costs in its Medicare Advantage unit, leading to a suspension of its 2025 financial outlook. The company's shares plummeted significantly following the earnings miss and guidance withdrawal, reflecting a sharp decline in investor confidence. Shares fell nearly 20% in pre-market trading after the initial Q1 earnings report and later hit their lowest closing price since October 2020. Rising care utilization, particularly in Medicare Advantage where physician and outpatient care activity was described as "twice the rate we anticipated," is a major challenge, straining medical costs and profitability. The Optum Health division faced reimbursement gaps due to members transitioning from exited plans who required costlier care than expected. The abrupt departure of former CEO Andrew Witty and the suspension of guidance less than a month after a previous downgrade indicate significant internal challenges and uncertainty regarding the company's financial trajectory. UnitedHealth faces reputational challenges and scrutiny over various practices, which new CEO Hemsley has acknowledged and pledged to review. Hemsley emphasized that future financial guidance would explicitly reflect rising care costs and that all segments must improve forecasting accuracy to rebuild trust. Analysts noted that UnitedHealth must demonstrate tangible progress in cost containment and deliver consistent, reliable forecasts to stabilize its stock and regain investor confidence.
Yahoo
3 days ago
- Business
- Yahoo
Parents sue over son's asthma death days after inhaler price soared without warning
When 22-year-old Cole Schmidtknecht tried to get a refill on the inhaler prescribed by his doctor to prevent asthma attacks. The medication that had formerly cost him less than $70 at his Appleton, Wisconsin pharmacy was now priced at more than $500, according to Cole's father, Bil Schmidtknecht. Stunned, Cole left the store with a medication designed to stop asthma attacks once they start, but without the Advair Diskus inhaler he needed to prevent attacks from happening in the first place. Five days after his pharmacy visit last year, Cole had a severe asthma attack, stopped breathing and collapsed. He never regained consciousness and died. Doctors attributed his death to asthma. His parents, Bil and Shanon Schmidtknecht, blame what they say is a dysfunctional system where medications can change in price overnight and without notice. A part of the insurance system that many Americans don't know about was responsible for the spike in Cole's inhaler price. Pharmacy benefit managers, or PBMs, are the middlemen that control behind the scenes which drugs will be on an insurance company's list of covered medications (called its formulary). They add or subtract medications through a process that emphasizes profits for the pharmacy benefit manager by way of 'rebates' from drug makers, said Gerard Anderson, a professor of health policy and management at the Johns Hopkins University Bloomberg School of Public Health. PBMs 'are looking for the drug that makes them the most money,' Andersen said 'It's insane that it's happening in America,' Bil Schmidknecht said. 'It's not broken. It's designed to work this way. It's just hurting us.' The Schmidtknechts are pushing for legislation that would require a 90-day warning when an insurance company's formulary is changed. They are also suing Optum Rx, the PBM that took Cole's Advair Diskus off his insurance company's formulary, and Walgreens, his pharmacy, which, the Schmidtknechts say, didn't offer Cole a way to control his asthma while another solution could be found. The lawsuit claims that Cole did not get the required 30 days' notice of the change, that his doctor wasn't contacted and that the pharmacy didn't provide Cole with any more affordable options. The Schmidknechts said Cole left the pharmacy with only a rescue inhaler, which is used for quick relief. But that type of medication by itself isn't strong enough to keep someone out of the emergency room if the asthma attack is severe, Dr. David Bernstein, an immunologist who is a professor in the division of immunology, allergy and rheumatology at the University of Cincinnati, said. 'It was empty at his house, next to his bed,' Bil said of the emergency inhaler. In a motion to dismiss the Schmidkneckt's lawsuit, Optum Rx expressed 'its deepest sympathies' for Cole's death and said federal law prohibits the case from being brought in state court. Optum also said three alternatives, each with a $5 copay, were available, and its system instructed Walgreens to contact Cole's doctor about those options. Walgreens also offered 'its deepest sympathies and cited privacy for why it can't discuss specifics in the case. In a statement, it added, 'In general, in cases where a medication is not covered by insurance, pharmacy staff may work with the plan, patient, and/or prescriber in an effort to process and dispense the prescription if able.' Cole would be 24 now. When speaking about all the things he could have been doing, his parents nearly break down. 'He was just so young, and he had his whole life ahead of him,' Shanon said. 'And it was so preventable and so unnecessary.' For the Schmidkneckts, it's about policy change. 'Justice for Cole, of course, but bigger than that, justice for us all,' Shanon said. Getting that change won't be easy. In the U.S., just three PBMs process 80% of prescriptions. And a big part of the PBM formulary playbook is secrecy, Anderson said. That way, patients don't learn how PBMs make their decisions about drugs and why a medication that had been on the formulary no longer is. Often no one, from the patients to the drug companies to the insurers, is aware of the details of the decisions the PBMs are making. 'They do not share this information widely, as it is considered a trade secret,' Anderson said. The deals are 'a negotiation between the drug companies and the PBM,' Anderson said. 'The drug company wants their drug on the formulary in a favorable position. The PBM wants to get the largest possible rebate.' The 'rebate' is the difference between the list price for a drug and what the PBM can buy it for, which can be 'a very much lower number than the list price,' Anderson said. When there are multiple drugs that do essentially the same thing, then there's a bidding war, usually a silent one. The rewards for the PBMs can be huge. A Federal Trade Commission report released in January found that, over the past few years, the three biggest PBMs — CVS Health Caremark Rx, Cigna's Express Scripts and UnitedHealth Group's Optum Rx — inflated the costs of numerous life-saving medications by billions of dollars. The companies countered that the FTC report's conclusions were misleading. In January, CVS Health said in a statement that it 'is inappropriate and misleading to draw broad conclusions from cherry-picked 'specialty generic' outliers' and that the company's 'top priority is to make health care more affordable.' OptumRx said that it helped eligible patients save $1.3 billion last year and estimated that the median out-of-pocket payment for these patients was $5. To remember Cole, both his parents had a tattoo just like his inked onto their wrists. When they feel overwhelmed they glance down at it to remember the change they want to make in his honor. 'It's just everyone's little reminder, you know, from Cole to just keep living and that we can still be happy,' Shanon said. 'I keep trying to remind myself that happiness and joy and grief can co-exist.' We're reporting in depth on the systems surrounding our health care and insurance industries. If you are dealing with bills that seem to be out of line or a denial of coverage, care or repairs, whether for health, home or auto, please email us at Costofdenial@ This article was originally published on
NBC News
3 days ago
- Health
- NBC News
Parents sue over son's asthma death days after inhaler price soared without warning
When 22-year-old Cole Schmidtknecht tried to get a refill on the inhaler prescribed by his doctor to prevent asthma attacks. The medication that had formerly cost him less than $70 at his Appleton, Wisconsin pharmacy was now priced at more than $500, according to Cole's father, Bil Schmidtknecht. Stunned, Cole left the store with a medication designed to stop asthma attacks once they start, but without the Advair Diskus inhaler he needed to prevent attacks from happening in the first place. Five days after his pharmacy visit last year, Cole had a severe asthma attack, stopped breathing and collapsed. He never regained consciousness and died. Doctors attributed his death to asthma. His parents, Bil and Shanon Schmidtknecht, blame what they say is a dysfunctional system where medications can change in price overnight and without notice. A part of the insurance system that many Americans don't know about was responsible for the spike in Cole's inhaler price. Pharmacy benefit managers, or PBMs, are the middlemen that control behind the scenes which drugs will be on an insurance company's list of covered medications (called its formulary). They add or subtract medications through a process that emphasizes profits for the pharmacy benefit manager by way of 'rebates' from drug makers, said Gerard Anderson, a professor of health policy and management at the Johns Hopkins University Bloomberg School of Public Health. PBMs 'are looking for the drug that makes them the most money,' Andersen said 'It's insane that it's happening in America,' Bil Schmidknecht said. 'It's not broken. It's designed to work this way. It's just hurting us.' The Schmidtknechts are pushing for legislation that would require a 90-day warning when an insurance company's formulary is changed. They are also suing Optum Rx, the PBM that took Cole's Advair Diskus off his insurance company's formulary, and Walgreens, his pharmacy, which, the Schmidtknechts say, didn't offer Cole a way to control his asthma while another solution could be found. Cole had a rescue inhaler to deal with attacks when they occurred. But that type medication by itself isn't strong enough to keep someone out of the emergency room if the attack is severe, said Dr. David Bernstein, a professor in the division of Immunology, allergy and rheumatology at University of Cincinnati. The lawsuit claims that Cole did not get the required 30 days notice of the change; that his doctor wasn't contacted; and that the pharmacy didn't provide Cole with any more affordable options. The Schmidknechts said Cole left the pharmacy with only a rescue inhaler, which is used for quick relief. But that type medication by itself isn't strong enough to keep someone out of the emergency room if the asthma attack is severe, immunologist Dr. David Bernstein, a professor in the division of immunology, allergy and rheumatology at the University of Cincinnati, said. 'It was empty at his house, next to his bed,' Bil said of the emergency inhaler. In a motion to dismiss the Schmidkneckt's lawsuit, Optum Rx expressed 'its deepest sympathies' for Cole's death and said federal law prohibits the case from being brought in state court. Optum also said three alternatives, each with a $5 copay, were available, and its system instructed Walgreens to contact Cole's doctor about those options. Walgreens also offered 'its deepest sympathies and cited privacy for why it can't discuss specifics in the case. In a statement, it added, 'In general, in cases where a medication is not covered by insurance, pharmacy staff may work with the plan, patient, and/or prescriber in an effort to process and dispense the prescription if able.' Cole would be 24 now. When speaking about all the things he could have been doing, his parents nearly break down. 'He was just so young and he had his whole life ahead of him,' Shanon said. 'And it was so preventable and so unnecessary.' For the Schmidkneckts, it's about policy change. 'Justice for Cole, of course, but bigger than that, justice for us all,' Shanon said. Getting that change won't be easy. In the U.S., just three PBMs process 80% of prescriptions. And a big part of the PBM formulary playbook is secrecy, Anderson said. That way, patients don't learn how PBMs make their decisions about drugs and why a medication that had been on the formulary no longer is. Often no one, from the patients to the drug companies to the insurers, is aware of the details of the decisions the PBMs are making. 'They do not share this information widely, as it is considered a trade secret,' Anderson said. The deals are 'a negotiation between the drug companies and the PBM,' Anderson said. 'The drug company wants their drug on the formulary in a favorable position. The PBM wants to get the largest possible rebate.' The 'rebate' is the difference between the list price for a drug and what the PBM can buy it for, which can be 'a very much lower number than the list price,' Anderson said. When there are multiple drugs that do essentially the same thing, then there's a bidding war, usually a silent one. The rewards for the PBMs can be huge. A Federal Trade Commission report released in January found that, over the past few years, the three biggest PBMs — CVS Health Caremark Rx, Cigna's Express Scripts and UnitedHealth Group's Optum Rx — inflated the costs of numerous life-saving medications by billions of dollars. The companies countered that the FTC report's conclusions were misleading. In January, CVS Health said in a statement that it 'is inappropriate and misleading to draw broad conclusions from cherry-picked 'specialty generic' outliers' and that the company's 'top priority is to make health care more affordable.' OptumRx said that it helped eligible patients save $1.3 billion last year and estimated that the median out-of-pocket payment for these patients was $5. To remember Cole, both his parents had a tattoo just like his inked onto their wrists. When they feel overwhelmed they glance down at it to remember the change they want to make in his honor. 'It's just everyone's little reminder, you know, from Cole to just keep living and that we can still be happy,' Shanon said. 'I keep trying to remind myself that happiness and joy and grief can co-exist.'
Yahoo
22-05-2025
- Business
- Yahoo
UnitedHealth Group Incorporated (UNH) Faces Mounting Backlash Amid Billing Disputes, CEO Resignation, and Criminal Probe
UnitedHealth Group Incorporated (NYSE:UNH)'s UnitedHealthcare, the largest private health insurer in the U.S., is facing unprecedented public and regulatory scrutiny amid mounting patient frustration and industry turmoil. In 2023, San Diego benefits advocate Sue Cover spent six months battling a $1,000 billing dispute, highlighting the widespread challenges Americans face with insurance companies. UnitedHealthcare, which covers over 29 million Americans and controls 15% of the market, has become a focal point for criticism over denied claims, administrative hurdles, and rising healthcare costs. A healthcare professional wearing a health communications device discussing patient data with a colleague. The company's reputation has suffered from high claim denial rates, 33% for certain ACA plans in 2023, among the highest in the industry, and lawsuits alleging improper use of AI to deny care. UnitedHealth Group Incorporated (NYSE:UNH)'s influence extends beyond insurance, with ownership of pharmacy benefit manager Optum Rx and affiliations with about 90,000 doctors, raising concerns about conflicts of interest and profit-driven care. Recent setbacks include a $300 billion market cap loss, CEO Andrew Witty's resignation, a criminal probe into Medicare Advantage practices, and fallout from a major ransomware attack on its Change Healthcare subsidiary. Experts say UnitedHealth Group Incorporated (NYSE:UNH)'s woes are symptomatic of a broader, costly, and convoluted U.S. healthcare system where insurers' cost-cutting tactics can delay or deny critical patient care. While we acknowledge the potential of UNH to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than UNH and that has 100x upside potential, check out our report about this READ NEXT: and Disclosure: None.
