UnitedHealth Group Faces DOJ Probe into Medicare Advantage Coding Practices

UnitedHealth Group, a major player in the U.S. health insurance sector, disclosed in a recent SEC filing that it is currently under investigation by the U.S. Department of Justice concerning its Medicare program practices. This announcement came amidst reports of federal scrutiny into the company's billing and diagnostic recording methods within its Medicare Advantage plans, which serve over 8 million members. UnitedHealth has confirmed it is cooperating with both criminal and civil inquiries as part of the federal probe.

The investigation centers on allegations regarding the company’s use of diagnostic coding to increase reimbursements from Medicare Advantage, a program offering private-plan options under Medicare primarily for seniors. These practices are being examined for potential health care fraud, with particular focus on the deployment of clinical staff to document diagnoses that influence federal payments.

UnitedHealth, which also operates a significant pharmacy benefits and care delivery business through its Optum segment, reported over $400 billion in revenue last year, ranking it high on the Fortune 500 list. Despite this scale, the company has faced recent operational challenges, including investor lawsuits and ongoing regulatory scrutiny, contributing to a notable decrease in its stock price.

The company emphasized its history of compliance and transparent audits conducted by the Centers for Medicare & Medicaid Services, which have previously affirmed the accuracy of UnitedHealth’s Medicare Advantage coding. Additionally, the company has initiated an independent review to ensure its practices, coding, and pharmacy services meet regulatory standards.

This development unfolds against a backdrop of executive leadership changes and market pressures. The investigation highlights broader regulatory focus on Medicare Advantage providers' billing practices, signaling potential shifts in compliance expectations for the industry. UnitedHealth's cooperative approach suggests ongoing monitoring and potential adjustments to maintain regulatory alignment and market confidence.