UnitedHealth facing DOJ investigation over Medicare billing

UnitedHealth Group revealed Thursday it’s facing Department of Justice investigations over its Medicare billing practices, adding to a string of setbacks for a corporation that owns the nation’s largest and strongest private insurer.

In a securities filing, the corporate said that it has began complying with formal criminal and civil requests from the DOJ, and that it reached out to the department after reports of the probes surfaced. UnitedHealth also said it has launched a third-party review of its business policies and performance metrics.

The corporate told CNBC that it expects to finish that review toward the tip of the third quarter.

Within the filing, UnitedHealth said it “has full confidence in its practices and is committed to working cooperatively with the Department throughout this process.”

UnitedHealth Group shares dropped around 2% on Thursday. The corporate’s executives will likely face questions on the probe during its second-quarter earnings call on July 29.

Jared Holz, Mizuho Securities health-care strategist, said in an email to clients on Thursday that the announcement is “not shocking,” but noted that the corporate previously denied DOJ investigation claims. He said UnitedHealth’s decision to confess to the probes and cooperate with the department “all sounds logical because it moves forward with a brand new CEO.”

The corporate announced the abrupt departure of former CEO Andrew Witty in May.

UnitedHealth’s announcement on Thursday comes after The Wall Street Journal reported in May that the Department of Justice is conducting a criminal investigation into the health-care giant over possible Medicare fraud. In response on the time, the corporate said it stands “by the integrity of our Medicare Advantage program.”

In July, the Journal also reported that the DOJ interviewed several doctors about UnitedHealth’s practices and whether or not they felt pressured to submit claims for certain conditions that bolstered payments from the Medicare Advantage program to the corporate. 

That marked the second time this yr that the insurer’s Medicare Advantage business has come under federal scrutiny. The Journal also reported in February that the DOJ is conducting a civil investigation into whether the corporate inflated diagnoses to trigger extra payments to its Medicare Advantage plans. 

But on Thursday, UnitedHealth said independent audits by the Centers for Medicare and Medicaid Services “confirm” that the corporate’s practices are “amongst probably the most accurate within the industry.”

UnitedHealth also pointed to a special master’s suggestion in March in favor of the corporate in a yearslong legal battle with the DOJ that began with a whistleblower who alleged the corporate illegally withheld a minimum of $2 billion through the Medicare Advantage program. The special master assigned to the case by a judge said the DOJ lacked evidence. 

UnitedHealthcare’s Medicare and retirement segment, which incorporates the Medicare Advantage business, is UnitedHealth Group’s largest revenue driver, raking in $139 billion in sales last yr.

The update within the probe comes after a tumultuous last yr for UnitedHealthcare. Shares of UnitedHealthcare’s parent company, UnitedHealth Group, are down greater than 42% for the yr after it suspended its 2025 forecast amid skyrocketing medical costs, announced the surprise exit of Witty and grappled with the reported probes into its Medicare Advantage business. 

The corporate’s 2024 wasn’t any easier, marked by a historic cyberattack and the torrent of public blowback after the murder of UnitedHealthcare’s CEO, Brian Thompson.

— CNBC’s Bertha Coombs contributed to this report.