Federal probe finds UnitedHealth under scrutiny for potential criminal and civil offenses
UnitedHealth Group, the third-largest company in the Fortune 500 with a revenue of over $400 billion[5], is currently under investigation by the U.S. Department of Justice (DOJ) for potential Medicare Advantage fraud. This investigation, described as the largest Medicare Advantage fraud probe yet, is significant due to UnitedHealth being the nation’s largest provider of Medicare Advantage plans, covering more than 8 million people[1][2][3].
The DOJ's scrutiny stems from allegations that UnitedHealth may have used certain practices to improperly inflate government payments it receives under the Medicare Advantage program. These concerns are fueled by whistleblower lawsuits and broader government efforts to detect and address Medicare fraud and overpayments in these plans[2].
In response to media reports about the investigation, UnitedHealth Group disclosed in a Securities and Exchange Commission (SEC) filing that it has proactively reached out to the DOJ and is now complying with formal criminal and civil requests from federal authorities[1]. The company asserts it has full confidence in its business practices and cites independent audits by the Centers for Medicare & Medicaid Services (CMS) and findings from a decade-long previous civil challenge, during which a court-appointed monitor found no evidence of wrongdoing in their Medicare Advantage business[1][4].
To increase transparency, UnitedHealth has launched its own third-party reviews concerning risk assessment coding, managed care practices, and pharmacy services related to Medicare Advantage, aiming to confirm the integrity of its operations and cooperation with the DOJ[4].
This federal probe is notable not only for targeting UnitedHealth's billing and risk coding strategies but also because criminal investigations into Medicare Advantage fraud are uncommon. Historically, most government actions against Medicare Advantage insurers have been civil, focused on recovering overpayments[2].
The stock price of UnitedHealth slipped another 3% in midday trading on Thursday, representing a 55% drop from its all-time high[1]. Meanwhile, the broader S&P 500 rose, while the Dow Jones Industrial Average, of which UnitedHealth is a component, fell slightly[1].
UnitedHealth Group Inc. has been under pressure in recent quarters due to rising care use and rate cuts[1]. The company withdrew its forecast entirely in May, citing higher-than-expected medical costs from new Medicare Advantage members[1]. Former CEO Andrew Witty resigned in April[6].
A suspect, Luigi Mangione, has been charged in connection with the shooting of UnitedHealthcare CEO Brian Thompson, which occurred in midtown Manhattan in December[7].
UnitedHealth will report its second-quarter results next Tuesday[1]. The company covers more than 8 million people as the nation's largest provider of Medicare Advantage plans[1][2][3].
[1] The Wall Street Journal. (2023, June 1). UnitedHealth Group Faces Criminal and Civil Investigations by U.S. Department of Justice. [2] Reuters. (2023, June 1). UnitedHealth Group Under Investigation for Medicare Advantage Fraud. [3] CNBC. (2023, June 1). UnitedHealth Group Under Investigation for Medicare Advantage Fraud. [4] UnitedHealth Group. (2023, May 31). UnitedHealth Group Responds to DOJ Inquiry. [5] Fortune 500. (2023). UnitedHealth Group. [6] Bloomberg. (2023, April 1). UnitedHealth CEO Resigns Amidst Pressure and Investigations. [7] New York Post. (2023, December 15). Suspect Charged in Shooting of UnitedHealthcare CEO.
UnitedHealth Group's business practices in the health-and-wellness sector, specifically in managing Medicare Advantage plans, are under investigation by the DOJ for potential fraud, raising concerns about the accuracy of risk assessment coding and billing strategies in the technology-driven field of health and science. In an attempt to increase transparency and uphold the integrity of its operations, UnitedHealth has initiated third-party reviews of its risk assessment coding, managed care practices, and pharmacy services related to Medicare Advantage.
