UnitedHealth Group Under Investigation by DOJ
UnitedHealth Group recently disclosed that it’s being investigated by the Department of Justice (DOJ) regarding its Medicare claims practices. This came to light in a securities filing where the company noted that it has begun complying with both criminal and civil requests made by the DOJ. Additionally, UnitedHealth has initiated third-party reviews of its business policies and performance metrics.
Despite the ongoing investigation, the company expressed its confidence in its practices and stated its commitment to cooperating with the DOJ throughout this process. However, news of the investigation led to a nearly 4% drop in UnitedHealth Group shares during pre-market trading.
This revelation follows earlier reports in May where the DOJ was said to be pursuing a criminal investigation into potential Medicare fraud linked to the healthcare giant. At that time, UnitedHealth maintained that it relied on the integrity of the Medicare Advantage program.
The situation has escalated, as recent reports indicated that several doctors were interviewed about whether they felt pressured to file claims under conditions that would yield higher payments from Medicare Advantage. This represents the second time this year that UnitedHealth’s Medicare Advantage operations have faced federal scrutiny. Additionally, the DOJ is investigating whether diagnoses were inflated to increase payments for the Medicare Advantage plan.
Interestingly, earlier this year, UnitedHealth appeared to be moving toward a resolution of a long-standing legal battle with the DOJ, initiated by whistleblowers alleging that the company wrongfully retained about $2 billion through the Medicare Advantage program. A special master appointed to the case had recommended in favor of UnitedHealth, stating a lack of evidence from the DOJ.
The Medicare and retirement segment, which includes its Medicare Advantage business, is the primary revenue source for UnitedHealth Group, drawing in approximately $139 billion in sales over the last year.
This update on the investigation comes amid previous challenges faced by UnitedHealthcare, the largest private insurance provider in the U.S. Last year, the parent company’s stock plummeted by over 42%, coinciding with the surprise departure of former CEO Andrew Whitty and various operational hurdles, including a series of cyberattacks and public outcry after the death of CEO Brian Thompson.
