The California Public Employees’ Retirement System is accusing UnitedHealth Group of securities fraud related to its Medicare Advantage billing practices.
The class action, first filed in May 2024 and amended March 21, alleges that UnitedHealth misled investors about its operations, including Medicare Advantage upcoding practices that inflated the company’s revenue. The complaint, filed in the U.S. District Court of Minnesota, also names CEO Andrew Witty, former UnitedHealthcare CEO Brian Thompson, and Chairman Stephen Hemsley.
According to the complaint, the company pushed providers to increase diagnoses through incentives and other pressures through the use of its HouseCalls program, which involved sending nurse practitioners to perform in-home health assessments that allegedly resulted in unsupported diagnoses.
The lawsuit also claims that UnitedHealth executives engaged in insider trading by selling millions of dollars worth of stock based on nonpublic information about a Department of Justice investigation into the company’s practices. CalPERS, which lost millions of dollars on its UnitedHealth stock holdings, is seeking compensatory damages for investors who purchased company stock between September 2021 and February 2025. The pension fund oversees about $500 billion in assets for public sector retirees in California.
UnitedHealth has denied the allegations in court filings and in public statements, arguing that its MA practices are legal and heavily regulated by the government. According to the Minnesota Star Tribune, the company has also contested the claims of insider trading, saying that executives increased their stock holdings rather than selling off shares in anticipation of negative news.
This lawsuit cites a series of investigative media reports, including those from the Wall Street Journal and STAT News, which have noted concerns about UnitedHealth’s MA billing practices.
