UnitedHealth Group under DOJ investigation over Medicare billing practices

UnitedHealth Group under DOJ investigation over Medicare billing practices © JHVEPhoto - stock.adobe.com

UnitedHealth Group, the nation’s largest health insurer, disclosed Thursday that it is cooperating with a criminal and civil investigation by the U.S. Department of Justice (DOJ) into its Medicare billing practices. The probes are focused on the company’s handling of diagnoses that led to higher payments from the federal government under the Medicare Advantage (MA) program.

UnitedHealth said it proactively contacted the DOJ after reviewing media reports Thursday morning and has begun complying with formal requests.

“The Company has now begun complying with formal criminal and civil requests from the [DOJ],” UnitedHealth said in an official statement Thursday. “The Company has full confidence in its practices and is committed to working cooperatively with the [DOJ] throughout this process."

UnitedHealth emphasized its long-standing record of compliance and said that independent audits by the Centers for Medicare & Medicaid Services (CMS) have confirmed its practices are “among the most accurate in the industry.”

The investigations mark another escalation in a rather tumultuous stretch for the health care giant, which brought in $400 billion in 2024. They are also facing DOJ antitrust scrutiny over their $3.3 billion planned acquisition of home-health firm Amedisys.

Billions in bonus payments at stake

The Wall Street Journal first reported in February that the DOJ had launched a civil fraud probe into UnitedHealth’s MA billing, focusing on the addition of high-value diagnoses that inflate risk scores and drive higher payments from CMS.

Patients under UnitedHealth-employed physicians were reportedly diagnosed at significantly higher rates with conditions like hyperaldosteronism, a rare hormonal disorder.

The Journal’s analysis of Medicare data between 2019 and 2021 found that in-home assessments conducted by UnitedHealth nurses triggered an average of $2,735 in added federal payments per visit. The data revealed that some diagnoses were added to patient charts even when no treating physician had made the determination.

Whistleblowers and provider interviews

In January, DOJ attorneys interviewed multiple former UnitedHealth-employed clinicians, including Valerie O’Meara, a nurse practitioner who said she was pressured to add diagnoses without supporting lab tests. DOJ attorneys asked whether these practices amounted to fraud, she said, and focused on company incentives and software tools used to guide documentation.

The DOJ has not commented on the ongoing probe as of Thursday morning. The Department of Health and Human Services’ Office of Inspector General (HHS-OIG) — also reportedly involved in the investigation — is yet to comment.

UnitedHealth response: Internal review and rebuttal

In its official statement, UnitedHealth said it has launched a third-party review of its own, aimed at assessing risk adjustment coding, managed care practices and pharmacy services. The company reiterated its belief that its documentation efforts improve care by identifying conditions early.

UnitedHealth also pointed to a favorable recommendation from a court-appointed special master earlier this year in a separate, decade-long civil case related to MA billing. The master found no evidence supporting claims of wrongdoing.

Stock hit and industry implications

Shares of UnitedHealth Group Incorporated (UNH) dropped 3.92% (-$11.47) as of midday Thursday, down to $281.04, continuing a yearlong decline. The company is down 55% from its all-time high. Number two MA insurer Humana has also seen its shares fall amid renewed scrutiny of the MA space.

The Medicare and Retirement division, which includes UnitedHealthcare’s MA plans, brought in $139 billion in revenue last year — making it the company’s single largest segment.

UnitedHealth has faced multiple public challenges over the past couple of years, including a historic cyberattack, the fatal shooting of UnitedHealthcare CEO Brian Thompson in December and the abrupt resignation of UnitedHealth Group CEO Andrew Witty in May.

The company also suspended its 2025 financial guidance due to surging medical costs, according to Market Watch.

What’s next?

UnitedHealth executives are expected to address the investigation during their July 29 second-quarter earnings call. The company had previously denied that any investigation was underway.

The broader implications for MA and private insurers remain to be seen, especially as the DOJ intensifies oversight of a program that now covers more than half of all Medicare beneficiaries.

For now, UnitedHealth says it remains committed to cooperating with authorities and delivering care as “responsible stewards of American tax dollars.”