April 13, 2025

UnitedHealth & Advance Payments to Providers

Last week, there were a number of articles concerning UnitedHealth, and their requiring Providers to repay the advance payments (loans) they received after last year’s Cyberattack at United’s, Change Healthcare.

Change Healthcare is a subsidiary or sub-division of Optum, which is a subsidiary of UnitedHealth. Change was purchased by UnitedHealth in 2022 and processes 50% of the nation’s medical claims.

After February 2024, Cyberattack, United offered their medical providers and clinics, the opportunity to receive an advance payment, since Change was unable to process claims. It is unclear whether Hospital Systems were included in that offer.

There appears to be varying degrees of misunderstanding, as to how those advance payments were to be repaid. Andrew Witty, C.E.O. of United, stated in a Senate Hearing last year, that “the providers would only be required to repay these loans when “they, not me,” confirm their cash flow is normalized.”

Another story, is that when the loans were issued, that the terms were interest at 8.5%, with payments over 5 years. Another, was that when a provider signed up for a loan, United reserved the right to withhold future payments from provider claims.

Now, United is said to have sent emails to their providers, stating that they want the loan repaid in 5 days. Obviously, a lot of confusion.

It has been stated that United paid out $9 billion in advance payments

( loans) to providers, and has been repaid $4.5 billion as of year-end 2024. That would leave a balance due of $4.5 billion.

A bystander, like me, can state that this is a mess!

In 2022, a Medicaid Managed Care Company, that I was a co-founder of, was sold to UnitedHealth. At the time, we were paying our providers within 30 days of receiving a valid claim. We had determined that the “good will” that was created with the providers, by paying in that time period, did not justify the amount of interest we might make, by not paying until 60 or 90 days.

United, at that time wasn’t paying their providers for 60 to 90 days. They wanted to show higher cash amounts on their balance sheet, even though their claims liability was there also.

I can understand the problems that providers have, if their claims are not paid in a timely manner. It has been reported that 58% of Medical Providers have less than 30 days, in cash available.

Now, many of the providers who received advances are not in a position to repay these advances (loans) in five days. As someone who has been involved with providers, bookkeeping and finances are not generally on a list of priorities for them.

What makes no sense, is how a large organization, like United, could have created this problem. The Providers have to take some blame also.

As a spectator, from afar, it seems that these advance payments should have been based upon the number of months that it was estimated, before Change Healthcare would be back in operation paying claims, at the average monthly claims payments to the provider.

Then the claims processed, after Change was back in operation, should have been offset against the advance payments (loans) to the provider. Interest or no interest should have been clearly stated as well as any other conditions.

It is entirely possible that United’s systems would not allow for the computations necessary to achieve this. If so, a work around should have been established. Now, United is in the news again, and not in a good way.

I looked at United’s financial statements for the year ended December 31, 2024, to see whether they were having a cash issue. It doesn’t appear so. Cash and cash equivalents amount to $25.4 billion. That is up from $23.4 billion as of the end of 2023.

Hopefully, a satisfactory resolution will be reached with both parties. They need each other.

Jess Sweely

Madison, Va.