(Bloomberg) — The US Justice Department has been investigating UnitedHealth Group Inc.’s Medicare billing practices, a person familiar with the matter said. The company’s stock fell sharply.
Most Read from Bloomberg
The Wall Street Journal first reported the civil fraud investigation into whether the insurance giant’s practices related to patient diagnoses force higher payments from the government’s Medicare Advantage program.
Shares of UnitedHealth fell 7.2% in New York. Humana Inc., which has a large Medicare business, dropped 5.7%.
The DOJ declined to comment on the news. UnitedHealth pushed back against the report.
“We are not aware of the ‘launch’ of any ‘new’ activity,” the insurer said in an emailed statement. “Any suggestion that our practices are fraudulent is outrageous and false.”
Meanwhile, the Justice Department has been conducting a broad antitrust investigation of UnitedHealth’s practices that started under the Biden administration. That probe emerged out of concerns about UnitedHealth’s acquisitions of health-care providers and data companies, Bloomberg reported at the time. Decisions about that inquiry will fall to Trump’s antitrust chief Gail Slater, who is awaiting confirmation by the Senate.
It wasn’t immediately clear whether the Medicare billing inquiries are related to the antitrust investigation.
More Bad News
Morningstar analyst Julie Utterback said UnitedHealth’s dramatic share decline looks like an “overreaction” given the relatively small size of the company’s Medicare Advantage division compared to its overall business.
“But when you look at what’s happening post-shooting and in the DOGE era, regulators may be more emboldened than usual to take action on companies like this that perhaps are milking the system, if you will,” Utterback said.
The government has been scrutinizing costs in Medicare Advantage, a privately administered version of Medicare, a federal insurance program for elderly. A key group that advises Congress on Medicare policy has raised concerns about how the program’s payment system can be manipulated, declaring an “urgent need for a major overhaul,” in a 2024 report.
More than half of those on Medicare now get their benefits through Medicare Advantage, private plans which get payments from the US government. Each year, the plans submit giant data files to Medicare with diagnostic codes meant to reflect their members’ illnesses. Those codes determine how much the insurers get paid.
