UnitedHealth Cooperates with Federal Investigations into Medicare Advantage Practices

UnitedHealth Group is cooperating with federal criminal and civil investigations regarding its Medicare Advantage business, following a review of media reports. The investigations focus on the company’s billing practices and the recording of diagnoses that affect payments under Medicare Advantage plans, which are privately managed alternatives to traditional Medicare coverage for people aged 65 and older.

UnitedHealthcare, a subsidiary of UnitedHealth Group, serves over 8 million Medicare Advantage members and is the largest provider in this market segment. The business has experienced financial pressures recently due to increased healthcare utilization and regulatory rate adjustments. The civil and criminal probes examine whether practices involving the collection of diagnoses by healthcare professionals may have influenced payment amounts.

In an SEC filing, UnitedHealth expressed confidence in its business practices and stated it is working cooperatively with the Department of Justice. The company, one of the largest U.S. health insurers and pharmacy benefit managers, also operates Optum, a business providing healthcare services and technology support.

Financially, UnitedHealth reported over $400 billion in revenue last year, ranking it as the third-largest company on the Fortune 500 list. However, its stock has declined significantly from its peak last fall, impacted by leadership changes, including the death of its UnitedHealthcare CEO, and adjustments to financial forecasts due to higher-than-expected medical costs from new Medicare Advantage enrollees.

The company plans to release its second-quarter earnings soon, which will be closely watched by investors amid ongoing regulatory scrutiny and operational challenges. This situation highlights the dynamic risks health insurers face in managing Medicare Advantage plans, particularly relating to compliance, regulatory oversight, and cost management.