UnitedHealth Group under Investigation for Medicare Billing Practices
UnitedHealth Group, the largest private insurer in the United States, has disclosed that it is currently under investigation by the Department of Justice (DOJ) over its Medicare billing practices. This revelation adds to an ongoing series of challenges faced by the health-care giant.
Compliance with DOJ Requests
UnitedHealth Group has begun to comply with both civil and criminal requests made by the DOJ. The company has also initiated a review of its business policies and performance metrics by a third party. UnitedHealth Group expects to complete this review by the end of the third quarter.
UnitedHealth Group’s Confidence in its Practices
In a securities filing, UnitedHealth Group expressed full confidence in its practices and committed to cooperating fully with the DOJ throughout the investigative process. Despite the investigation, the company’s shares did drop around 2% last Thursday.
Industry Analyst’s Views
Jared Holz, a health-care strategist at Mizuho Securities, described the investigation as “not shocking”. He highlighted that the company had previously denied DOJ investigation claims. However, UnitedHealth Group’s decision to acknowledge the probes and cooperate with the DOJ seems logical, especially as the company transitions under new leadership following the sudden departure of former CEO Andrew Witty in May.
Previous Allegations and Investigations
This is not the first time UnitedHealth Group has faced scrutiny over its Medicare practices. Reports surfaced in May of a criminal investigation into possible Medicare fraud. The company defended the integrity of its Medicare Advantage program in response. In July, the DOJ interviewed several doctors about UnitedHealth’s practices, inquiring if they felt pressured to submit claims for certain conditions that increased payments from the Medicare Advantage program to the company. This formed part of a civil investigation into allegations that the company inflated diagnoses to trigger extra payments to its Medicare Advantage plans.
UnitedHealth’s Response to Allegations
Despite these allegations, UnitedHealth Group insists that independent audits by the Centers for Medicare and Medicaid Services confirm that the company’s practices are “among the most accurate in the industry.”
UnitedHealth Group’s Business Performance
The Medicare and retirement segment, which includes the Medicare Advantage business, is UnitedHealth Group’s largest revenue driver, bringing in $139 billion in sales last year. However, the past year has been tumultuous for UnitedHealthcare. Shares of UnitedHealth Group are down more than 42% for the year after it suspended its 2025 forecast amid skyrocketing medical costs, announced the surprise exit of Witty and grappled with the reported probes into its Medicare Advantage business.
Challenging Times for UnitedHealth Group
The company’s 2024 wasn’t any easier, marked by a historic cyberattack and the torrent of public blowback after the murder of UnitedHealthcare’s CEO, Brian Thompson.
Report contributed by Bertha Coombs of CNBC.
