US Justice Department Investigates UnitedHealth Group’s Medicare Billing Practices
The US Department of Justice (DOJ) is conducting a civil fraud investigation into UnitedHealth Group’s Medicare billing practices, according to reports from Bloomberg and The Wall Street Journal. The investigation is examining whether the company’s methods for diagnosing patients lead to inflated payments from the government’s Medicare Advantage program.
Shares of UnitedHealth Group fell 7.2% at market close, while Humana Inc., another major player in the Medicare market, experienced a 5.7% drop. The DOJ has declined to comment on the investigation.
In response to the reports, UnitedHealth Group stated, “We are not aware of the ‘launch’ of any ‘new’ activity. Any suggestion that our practices are fraudulent is outrageous and false.”
Antitrust Investigation
The Medicare billing inquiry is unfolding alongside a wider antitrust investigation into UnitedHealth Group’s business practices. This probe, initiated during the Biden administration, has focused on the company’s acquisitions of healthcare providers and data companies, as previously reported by Bloomberg. Gail Slater, President Trump’s antitrust chief nominee, will now oversee this investigation, pending her Senate confirmation.
It remains uncertain whether the Medicare billing investigation is directly linked to the antitrust inquiry.
Market Reaction
Morningstar analyst Julie Utterback described the stock decline as a possible “overreaction,” considering the size of UnitedHealth Group’s Medicare Advantage business relative to its overall operations. Utterback added, “But when you look at what’s happening post-shooting and in the DOGE era, regulators may be more emboldened than usual to take action on companies like this that perhaps are milking the system, if you will.”
The government has been scrutinizing costs within Medicare Advantage, the privatized version of Medicare. A congressional advisory group on Medicare policy raised concerns about the program’s payment structure in a 2024 report, advocating for significant reforms.
More than half of Medicare beneficiaries are enrolled in Medicare Advantage, where private insurers receive payments from the government based on the diagnostic codes they submit annually. Insurers get higher payments for patients with more severe conditions.
In recent years, the Biden administration sought to limit payments made to Medicare Advantage plans, stemming from concerns raised by lawmakers, watchdogs, and whistleblowers about the potential for misuse of funds.
Recent Controversies
UnitedHealth Group has been under heightened scrutiny in recent months. In December, Brian Thompson, head of the company’s insurance division, was killed while en route to an investor conference, sparking public debate over insurers’ handling of medical care denials.
Further compounding the company’s recent troubles, UnitedHealth shares dipped earlier this month after billionaire investor Bill Ackman, in a now-deleted post on X, suggested that the company had overstated its profits. The post referenced a doctor who paused medical care to handle a call from the insurer. UnitedHealth Group responded by stating that a hospital error caused the call and that they had contacted the US Securities and Exchange Commission regarding Ackman’s post.
