UnitedHealth Group confirmed Thursday that it is under investigation by the Department of Justice for its Medicare billing practices and is cooperating with both criminal and civil inquiries. The company disclosed the development in a securities filing, noting it had proactively contacted the DOJ following media reports of the probe. Shares fell 2% to $287.39, extending a sharp decline that has erased more than half the company's market value from its all-time high.
"UnitedHealth has a long record of responsible conduct and effective compliance," the company stated in its SEC filing. It added, "We have full confidence in our practices and are committed to working cooperatively with the Department throughout this process."
The DOJ's investigation centers on UnitedHealth's Medicare Advantage operations, which generated $139 billion in sales last year and are part of the company's largest business segment. The Wall Street Journal reported earlier this year that the DOJ was examining whether UnitedHealth inflated diagnoses to increase government payments under Medicare Advantage. More recently, the Journal reported that DOJ investigators interviewed physicians to determine if they felt pressured to submit claims that would trigger higher reimbursements.
The company has begun a third-party review of its policies and performance metrics and expects to complete that by the end of the third quarter, UnitedHealth told CNBC. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) has conducted audits the company says confirm its Medicare billing "is among the most accurate in the industry."
A special master appointed by a federal judge in a long-running whistleblower case recommended in March that the DOJ lacked sufficient evidence against UnitedHealth regarding allegations of withholding $2 billion in Medicare Advantage payments. The case remains ongoing.
Thursday's disclosure follows months of turbulence for the health care conglomerate. UnitedHealth's 2024 has been marked by a spike in medical costs, a historic cyberattack, and executive turnover. CEO Andrew Witty abruptly resigned in May, and UnitedHealth suspended its 2025 forecast amid rising uncertainty.
The company's stock has lost over 42% year-to-date. In April, shares plunged after UnitedHealth cut its full-year forecast. The following month, Witty's resignation deepened investor concerns. In July, UnitedHealth was further rocked by the fatal shooting of UnitedHealthcare CEO Brian Thompson in Manhattan, with a 26-year-old suspect now facing charges.
UnitedHealth Group, which also operates the sprawling Optum care and technology division, is expected to report its second-quarter earnings on July 29. Analysts anticipate executives will face intense scrutiny over the DOJ probe and its potential financial impact.
