The U.S. Department of Justice has launched a civil fraud investigation into UnitedHealthcare’s Medicare Advantage billing practices. The federal government is examining whether the insurance giant is using patient diagnoses to illegally increase the lump sum monthly payments it receives through the Medicare Advantage program. UnitedHealthcare is one of the largest corporations in the world, with a market capitalization of $457 billion.
Its operations include health technology, pharmacy benefits, and physician practices, making it a significant player in American healthcare. The company employs over 90,000 physicians, making it the largest employer of doctors in the U.S.
The Medicare Advantage program is a public health insurance initiative for the elderly and disabled that covers more than 65 million Americans. About half of these beneficiaries use Medicare Advantage plans, which allow private insurers to manage their care.
The program was created during the George W. Bush administration with the intention of providing more efficient services than government-managed plans and saving taxpayers money. However, recent studies indicate that the program may be costing taxpayers billions more each year compared to traditional Medicare.
UnitedHealthcare’s billing practices under investigation
Beneficiaries have also raised issues such as difficulty accessing care and the requirement to seek permission from insurers before treatment. In response to the investigation, UnitedHealth Group stated, “The Wall Street Journal continues to report misinformation on the Medicare Advantage (MA) program.
The government regularly reviews all [Medicare Advantage] plans to ensure compliance, and we consistently perform at the industry’s highest levels on those reviews. We are not aware of the ‘launch’ of any ‘new’ activity as reported by the Journal.”
UnitedHealth Group has faced scrutiny for other parts of its business as well. In 2024, a massive data breach at its subsidiary, Change Healthcare, allowed hackers to exfiltrate as many as 85 million patient records.
Following the news of the investigation, UnitedHealth’s stock declined 10% in early morning trading. U.S. Sen. Charles Grassley (R-Iowa), a long-time proponent of Medicare Advantage health plans, has written to UnitedHealth Group CEO Andrew Witty demanding answers on the company’s billing practices.
Grassley has given UnitedHealth Group until March 10 to explain the steps it has taken to verify the accuracy of all diagnosis data submitted to the federal government and to quantify any inappropriate payments identified. UnitedHealth Group has said it welcomes the chance to share information with Grassley and asserts that it adheres to high ethical standards and supports annual audits of every Medicare Advantage health plan by the Centers for Medicare and Medicaid Services.
