UnitedHealth Faces DOJ Scrutiny Over Medicare Advantage as Industry Faces AI and Market Shifts

UnitedHealth Group has disclosed that it is responding to formal criminal and civil requests from the Department of Justice (DOJ) regarding its Medicare Advantage business. The company initiated contact with the government previously, following reports that it was under investigation. Medicare Advantage is a government program where private insurers like UnitedHealthcare provide benefits to eligible individuals and receive reimbursements from the government.

Previous reports indicated potential overdiagnosis practices that could lead to increased government payments, triggering the DOJ probe. This investigation adds to several challenges facing UnitedHealth, including leadership changes and a prior antitrust investigation. Additionally, the company’s stock has declined significantly amid these developments. Separately, ServiceNow’s CEO highlighted a strategic shift towards AI automation to reduce labor in IT, customer support, and security functions, emphasizing cost and efficiency benefits and reflecting broader industry trends in workforce management. In the consumer sector, Mattel reported mixed second-quarter financial results, with flat earnings per share and a slight revenue decline partly offset by international sales growth.

Different product lines showed varied performance, with Hot Wheels and building sets increasing sales while the dolls segment declined. Meanwhile, West Pharmaceutical saw significant earnings growth driven by high demand for GLP-1 drug components, which are integral to the delivery devices of popular weight-loss medications. This surge in demand contributed to better-than-expected earnings and revenue, highlighting the impact of pharmaceutical supply chains on specialized component manufacturers.