Dr. Mehmet Oz's ties to insurers may loom over his CMS confirmation hearing

WASHINGTON — President Donald Trump’s pick to lead the Centers for Medicare and Medicaid Services will likely face questions during his confirmation hearing Friday about his past support of expanding the Medicare Advantage program as well as his financial ties to the industry he will be tasked with overseeing.

If confirmed, Mehmet Oz, known best for his time as a TV personality and host of the daytime talk show “The Dr. Oz Show,” would be in charge of the federal agency responsible for providing health insurance through Medicaid, Medicare, the Children’s Health Insurance Program and other programs.

Lawmakers have expressed concern over Oz’s qualifications to lead CMS, an agency responsible for providing 160 million Americans’ health insurance. But doubts about his background and potential conflicts of interest will likely take center stage, though Oz’s nomination is far less controversial than that of Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Disease Control and Prevention director nominee Dave Weldon, whose nomination was pulled just an hour before he was to appear before the Senate Health, Education, Labor and Pensions Committee Thursday.

Still, Oz would take on the agency during a delicate time: Democrats worry an upcoming budget reconciliation bill would effectively gut Medicaid in an effort to pay for Trump’s legislative priorities.

“Dr. Oz will be administering the Medicare and Medicare Advantage systems and I am very worried that he is on a path to drive it in the wrong direction, encouraging more fraud and abuse through Medicare Advantage, in a way that ultimately could bankrupt the system,” said Sen. Elizabeth Warren, D-Mass., a member of the Senate Finance Committee, which has jurisdiction over Oz’s nomination.

On Thursday, they added a new concern to the mix, circulating a memo alleging that he avoided more than $400,000 in self-employment taxes paid into the trust fund that finances Medicare over a three-year period ending in 2023.

By contrast, Oz has so far been well received by Republican members of the committee. Sen. Thom Tillis, R-N.C., said he hopes Oz’s hearing will be a continuation of a prior meeting Oz had with him in his office.

“He’s quite qualified for the job, and I’m going to support his confirmation,” he said.

A preference for privatization

Prior to running for the U.S. Senate in Pennsylvania in 2022, Oz, 64, wrote an op-ed with former Kaiser Permanente CEO George Halvorson advocating “universal” health care coverage through Medicare Advantage, the alternative to traditional Medicare offered by private insurance companies, for “every American who is not on Medicaid.”

Oz and Halvorson argued Medicare Advantage offers better benefits than traditional Medicare, but patient advocates and lawmakers have raised concerns about plans denying necessary care for beneficiaries and narrow networks that make it difficult to find a health care provider.

Halvorson and Oz also claimed that Medicare fraud would disappear “as a government expense” because Medicare Advantage plans are paid lump sums for a beneficiary’s care, while traditional Medicare pays for each service. But government watchdogs have long raised the alarm that Medicare Advantage plans engage in fraud by making beneficiaries look sicker than they are to bilk higher payments from Medicare. Kaiser Permanente, and other insurers, have been accused of doing just that in lawsuits that are ongoing.

The two said the expansion would be paid for by implementing a 20% payroll tax, split between employees and employers.

They criticized the idea of expanding traditional Medicare to all Americans — a proposal endorsed by Sen. Bernie Sanders, I-Vt. — saying it would “continue the highly dysfunctional approach of buying every item of care by the piece, which incentivizes abuse and cripples systematic process improvement.”

On Dec. 10, a group of Democratic senators led by Warren sent a letter to Oz about that op-ed, arguing that the proposal would cost more and provide worse care. They cited a nonpartisan analysis that projected that private insurers will overcharge CMS $83 billion relative to traditional Medicare in 2024 alone.

The Democratic senators wrote that the plan “would entirely eliminate Traditional Medicare — a program you have criticized as ‘highly dysfunctional,’ but which provides more accessible and less expensive care than private insurers in Medicare Advantage.”

They also cited concerns about abuses by private insurers.

“In addition to overpayments, federal watchdogs have found that private insurers in Medicare Advantage routinely delay and deny medically necessary care, impose burdensome utilization management requirements on providers, and use deceptive marketing tactics to entice seniors to join Medicare Advantage plans. However, your call to replace Traditional Medicare with Medicare Advantage ignores these abuses,” the senators wrote.

“I think that he’s likely to have a fair number of questions about Medicare Advantage,” said Sen. Ron Wyden, D-Ore., the ranking member on the Senate Finance Committee. “That prediction didn’t take much chutzpah, did it?”

Financial conflicts of interest

Warren said she’s also concerned about Oz’s financial ties to the industry he would be tasked with regulating.

On Wednesday, she sent Oz a letter asking him to divest any remaining financial interests in companies that would stand to benefit from his decisions as CMS administrator.

“Entering this role with financial conflicts of interest would undermine your effectiveness and the effectiveness of the programs you are slated to administer,” Warren wrote.

According to Oz’s financial disclosure forms filed with the Office of Government Ethics, some of his investments include pharmaceutical company AbbVie Inc., fertility clinic company Inception Fertility LLC, drug company Eli Lilly and Co., and UnitedHealth Group Inc., among other companies.

UnitedHealth Group, the Senate Democrats wrote in December, “is currently under a sprawling antitrust investigation by the Department of Justice — including for its role in aggressively upcoding Medicare Advantage enrollees to secure higher payments from CMS — and has been sued on multiple occasions for Medicare fraud.

“Under your plan, UnitedHealth’s revenue from Medicare Advantage would roughly double to $274 billion annually,” they wrote.

Oz said he will divest any interests he has in UnitedHealth, in addition to other health-related companies, as soon as practicable within 90 day of his confirmation.

In October 2023, Oz was named a “global advisor and stakeholder” for the e-commerce supplement company iHerb. He frequently promotes their products to his millions of followers on Instagram, TikTok and X. In his ethics agreement, Oz stated he will divest any vested restricted stock units he has in iHerb, but will continue to have a financial interest in iHerb Oz Partners LLC.

In Warren’s March 12 letter, she asked him to remove himself from any financial stake in iHerb, and said it is unclear what iHerb Oz Partners LLC’s relationship is to iHerb.

“If you were to retain a financial interest in iHerb or an entity affiliated with it, you would have a clear conflict of interest,” she wrote. “For example, you could profit from increasing CMS’s coverage of nutrition supplements sold on iHerb’s platform — including expanding the share of the Medicare market controlled by Medicare Advantage companies, which at times cover over-the-counter supplements like those sold by iHerb. Or, for example, you could add more flexibilities to Part D prescription drug plans that currently only cover FDA-approved supplements.”

Potential clash on Ozempic

Some of Oz’s views also conflict with his potential future boss, Health and Human Services Secretary Robert F. Kennedy Jr.

Oz has praised anti-obesity drugs such as Ozempic, promoting them on his show and his social media channels over the years, while Kennedy has been a critic of the weight loss drugs, and in recent years there’s been an increased push for Medicare to cover the drugs.

In a 2019 segment of his show, Oz interviewed comedian Billy Gardell about his Type 2 diabetes and his use of the medication, which led him to lose 21 pounds after five months. Then, a representative from the drug company explained the results. The nine-minute segment was sponsored by Novo Nordisk A/S, the drug’s manufacturer. Oz referred to them as a “trusted partner.”

“The first line of response should be lifestyle. It should be eating well, making sure that you don’t get obese,” Kennedy told CNBC’s Jim Cramer in a Dec. 12 interview.

An Oct. 2024 report from the Congressional Budget Office estimated that expanding Medicare to cover weight loss drugs like Ozempic would cost $35 billion over eight years.

“In general, I think the amount of good done by these medications by helping people lose weight and improve their cardiovascular system — and it might have long-term benefits in a lot of other areas as well where obesity causes inflammation – is massive,” Oz said in an Instagram reel in August 2023.

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