DOJ Launches Civil Fraud Probe into UnitedHealth’s Medicare Advantage Practices Shares of UnitedHealth Group (NYSE:UNH) tumbled approximately 7% in premarket trading on Friday following reports from The Wall Street Journal that the U.S. Department of Justice (DOJ) has initiated a civil fraud investigation into the company’s business practices.
According to sources familiar with the matter, the DOJ’s probe focuses on how UnitedHealth allegedly adds questionable diagnoses to members’ medical records, which could result in inflated payments to its Medicare Advantage plans. The investigation also involves the Office of Inspector General at the U.S. Department of Health and Human Services, highlighting the seriousness of the allegations.
UnitedHealth Responds to Allegations UnitedHealth declined to comment directly on the investigation. However, in a statement posted on its website, the company criticized The Wall Street Journal’s reporting, calling it “misinformation” regarding the Medicare Advantage program. “Any suggestion that our practices are fraudulent is outrageous and false,” UnitedHealth stated.
Growing Scrutiny on UnitedHealth’s Business Practices This latest DOJ investigation is one of several legal and regulatory challenges UnitedHealth has faced in recent months:
- In February 2024, the DOJ launched an antitrust investigation into the company’s business operations.
- In November 2023, the DOJ sued to block UnitedHealth’s proposed $3.3 billion acquisition of home-health provider Amedisys (NASDAQ:AMED), citing concerns over market competition.
Market Reaction and Investor Concerns The news of another federal probe has added pressure on UnitedHealth’s stock, triggering a sharp premarket selloff. Investors remain cautious as regulatory scrutiny intensifies, with analysts closely monitoring the potential impact on UnitedHealth’s Medicare Advantage business and broader financial outlook.
As UnitedHealth navigates mounting legal challenges, industry experts anticipate heightened regulatory oversight for major managed care providers operating within the Medicare Advantage space.
