UnitedHealth Group is under criminal investigation by the Justice Department for alleged Medicare Advantage fraud, The Wall Street Journal reported May 14.
Citing individuals familiar with the matter, the outlet said the DOJ has been investigating the company since at least last summer over its MA business practices, but exact criminal allegations are unclear.
UnitedHealth told the Journal that it stands “by the integrity of our Medicare Advantage program.”
The report drove UnitedHealth’s shares down 13% on May 15, just two days after UnitedHealth said it replaced CEO Andrew Witty with former CEO Stephen Hemsley and suspended its 2025 earnings outlook following an “unusual and unacceptable” first quarter performance amid rising Medicare Advantage costs.
The recent developments have caused UnitedHealth’s stock to lose half its value (down $288 billion) within one month.
In February, the Journal reported that the Justice Department is investigating UnitedHealth’s MA billing practices amid allegations that the company inflated charges to maximize reimbursements. UnitedHealth has denied the existence of such an investigation.
The DOJ is also investigating the relationship between UnitedHealthcare and Optum, and the agency is suing to block the company’s planned $3.3 billion acquisition of home health provider Amedisys.
In addition, the DOJ is urging a federal court to allow a decade-old lawsuit against UnitedHealth Group to continue, which alleges the company overcharged the federal government through Medicare Advantage claims. In March, a retired judge appointed by the court to evaluate the case recommended the case be thrown out, writing that the government failed to prove that the claims detailed in the case were not backed by medical records.
The reported criminal MA investigation adds to a growing list of unprecedented challenges the company has faced over the past year that have heightened public scrutiny around its business practices, including the targeted killing of UnitedHealthcare CEO Brian Thompson and the crippling cyberattack on subsidiary Change Healthcare.
UnitedHealth is the country’s largest MA insurer, with 8.2 million members, 4.3 million members with Medicare supplement plans, and Part D membership at 2.8 million.
