Plummeting stocks for a prominent healthcare company in the spotlight due to the emergence of an inquiry by the Department of Justice
UnitedHealth Group, the third-largest company in the Fortune 500, is currently under investigation by the U.S. Department of Justice (DOJ) over its Medicare Advantage (MA) billing practices. The investigation, which started earlier this year, has focused on billing practices in recent months [1][2].
Cooperation and Compliance
UnitedHealth has demonstrated a willingness to cooperate throughout the investigation. The company proactively alerted the DOJ about the investigation after media reports and has started complying fully with formal criminal and civil requests [1][2][4].
Scope and Significance
This investigation is considered likely the largest Medicare Advantage fraud probe to date because UnitedHealth is the biggest MA provider in the nation, covering over 8 million members [3][4]. Unlike many prior investigations that have been civil, the DOJ’s probe of UnitedHealth includes a rare criminal component, signaling heightened scrutiny of potential fraudulent billing practices related to diagnoses [3].
Claims of Compliance
UnitedHealth maintains full confidence in its Medicare billing practices, citing that the Centers for Medicare & Medicaid Services (CMS) have independently audited and confirmed their diagnostic coding as among the most accurate in the industry. The company also references a court-appointed monitor finding no wrongdoing after a previous decade-long review of their Medicare Advantage business [1][2].
Context and Impact
The investigation comes amid broader federal scrutiny of Medicare Advantage programs nationally regarding allegations that insurers might inflate diagnoses to increase government payments. Other insurers like Anthem (now Elevance Health) have faced similar civil suits for such practices [3]. The ongoing inquiries add to an already challenging year for UnitedHealth, which has also faced antitrust investigations connected to acquisitions and leadership upheavals [1][2].
In April, shares of UnitedHealth plunged due to a spike in health care use, and the company has been under pressure due to rising care use and rate cuts in recent quarters [5]. The company's business, UnitedHealthcare, is the largest provider of Medicare Advantage plans. UnitedHealth Group's shares have slipped following the investigation announcement, and the company withdrew its forecast in May [6][7].
On Thursday morning, UnitedHealth's share price slipped another 2% to $287.39, representing a 54% drop from its all-time high [8].
The Journal also reported that a federal criminal health care-fraud unit is investigating how UnitedHealth Group used doctors and nurses to gather diagnoses that bolster payments [2]. UnitedHealth Group Inc. reached out to the Justice Department after reviewing media reports about investigations into certain aspects of the company's participation in the Medicare program [9]. UnitedHealth's Optum business provides care and technology support [10].
UnitedHealth will report its second-quarter results next Tuesday [11].
References
- The Wall Street Journal
- Reuters
- CNBC
- Axios
- CNBC
- Reuters
- The Wall Street Journal
- MarketWatch
- The Wall Street Journal
- UnitedHealth Group
- CNBC
- Although the DOJ investigation into UnitedHealth Group's Medicare Advantage billing practices is ongoing, the company has been proactive in cooperating with formal criminal and civil requests.
- UnitedHealth Group, the largest Medicare Advantage provider in the nation, is under investigation because the potential fraudulent billing practices related to diagnoses could lead to inflated payments from the government.
- Amidst the heightened scrutiny, UnitedHealth maintains confidence in its Medicare billing practices, citing past independent audits by the Centers for Medicare & Medicaid Services as evidence of their accuracy.
