The Justice Department has expanded its criminal investigation into UnitedHealth Group, examining the company’s pharmacy benefit manager, Optum Rx, and how it compensates its employed physicians, Bloomberg reported Aug. 26.
The probe now goes beyond the previously reported potential Medicare Advantage fraud. The Justice Department has not alleged misconduct by UnitedHealth or its executives, and the inquiry does not necessarily indicate that any charges will follow, according to the report.
In July, UnitedHealth said it was complying with criminal and civil investigations into its Medicare Advantage business. The disclosure came after The Wall Street Journal reported in May that the DOJ has been investigating allegations of Medicare Advantage billing and coding fraud at the company and interviewing former employees since at least 2024.
The Justice Department also has a civil fraud investigation into the company’s Medicare billing practices that’s separate from the criminal inquiry, which was first reported by the Journal in February.
In July, UnitedHealth said it “has a long record of responsible conduct and effective compliance” and that it “is committed to maintaining the integrity of its business practices and serving as reliable stewards of American tax dollars.”
In March, a special court master recommended that a more than decade-old DOJ lawsuit against UnitedHealth be thrown out, which alleges the company overcharged the federal government through MA claims.
As of the third quarter of 2024, UnitedHealth was composed of 2,694 subsidiaries across two core entities: UnitedHealthcare (insurance) and Optum (health services). UnitedHealthcare is the nation’s largest insurance company, with more than 50 million members across commercial, ACA, Medicare Advantage and managed Medicaid. The company controls 15% of the U.S. health insurance market.
Optum Health now employs or has contractual ties with more than 90,000 physicians, or about 10% of the U.S. physician workforce. Optum Rx is the third largest PBM in the country by market share, processing 23% of prescription drug claims in 2024.
The company has been working to stabilize investor confidence while navigating recent financial turbulence, leadership changes and the ongoing federal investigations. Lawmakers from both parties sold as much as $1.2 million in UnitedHealth stock against $950,000 in purchases this year following its confirmation of the probes. The company has also appointed a new lead independent director and public responsibility committee to monitor financial, regulatory and reputational risks moving forward. CEO Stephen Hemsley introduced an initiative in June to conduct a comprehensive review of all the company’s policies, risk assessment coding practices, managed care practices, and pharmacy services, with independent experts modifying strategies if appropriate.
Mr. Hemsley, who took over after former CEO Andrew Witty abruptly departed earlier this year, told investors in July that UnitedHealth has made “pricing and operational mistakes” and is shifting to a “tone of change and reform.”
In April, the company revised its 2025 earnings outlook, before suspending its forecast entirely in May over rising care costs. The enterprise is now projecting at least $14.65 in net earnings per share and total annual revenue between $444.5 billion and $448 billion.
