Dive Brief:
UnitedHealth on Thursday said it’s under federal investigation from the Department of Justice about its Medicare program.
The company said in a securities filing it was complying with the Justice Department on formal criminal and civil requests and had reached out proactively to the DOJ following media reports that UnitedHealth was facing investigations into its Medicare program.
UnitedHealth said it’s launched its own review of its policies and that it has “full confidence” in its practices. The company’s stock fell more than 2% in Thursday morning trading.
Dive Insight:
UnitedHealth’s Medicare program has reportedly been under scrutiny from federal investigators for possible criminal fraud this year.
In February, The Wall Street Journal reported that the Justice Department had launched an investigation into UnitedHealth’s Medicare billing practices, including potential overpayments in its Medicare Advantage program and at physician practices the insurer owns. The Journal then reported again in May and July that the Justice Department had launched a criminal investigation into the company for possible Medicare fraud and was questioning employees about how it documented medical diagnoses.
MA has come under increasing scrutiny from regulators and lawmakers for costing the government more than traditional Medicare — this year, the government is set to spend $84 billion more on MA beneficiaries than if they were enrolled in traditional Medicare.
Regulators and lawmakers have placed the blame on insurers. The program has been lucrative for insurance companies, who have also been accused of restricting care for seniors and exaggerating diagnoses to garner higher reimbursement.
In addition to investigating its Medicare practices, UnitedHealth has also reportedly been the target of antitrust investigations from the DOJ. The company, which owns the largest private insurer in the U.S., a physician network, a pharmacy benefit manager, and a billing and analytics business, was reportedly being investigated for anticompetitive effects between UnitedHealth and Optum, its health services arm that includes a physician group.
The acknowledgment of the investigation is a rare step by UnitedHealth, which has declined to comment publicly on potential DOJ investigations.
The company has struggled this year amid higher medical costs in its insurance business and new regulations on medical coding put in place by the Biden administration.
Once a bellwether stock for the industry, the company pulled its profit guidance for 2025 after underperforming on its first-quarter earnings and later replaced its CEO Andrew Witty. Investment banks have downgraded the company, and UnitedHealth’s stock is down about 43% from the beginning of the year.
UnitedHealth will report its second-quarter earnings results on July 29.
