UnitedHealth Investigated by DOJ over Medicare Billing Practices
UnitedHealth Group shares plummeted on Friday following reports that the U.S. Department of Justice (DOJ) has launched a civil fraud investigation into the healthcare giant's Medicare Advantage billing practices.
According to the Wall Street Journal, the DOJ is probing how UnitedHealth records diagnoses that determine payments under its Medicare Advantage plans, which are private alternatives to government-run Medicare coverage for seniors.
Anonymous sources cited by the Journal claim that the investigation focuses on recent billing practices. UnitedHealth has yet to comment on the report, but its UnitedHealthcare division is the largest provider of Medicare Advantage plans, covering over 7.8 million individuals.
Amidst rising healthcare utilization and rate cuts, UnitedHealth's Medicare Advantage business has faced challenges in recent quarters. The company's stock has been trading near $447, down over 10% since pre-market trading. Shares of other prominent Medicare Advantage insurers, such as Humana, have also declined.
The DOJ investigation comes amidst other turmoil within UnitedHealth Group. In December, UnitedHealthcare CEO Brian Thompson was shot and killed in Manhattan. His death sparked an outpouring of criticism against insurance companies and led to significant stock value losses.