Revelations of a civil fraud investigation into UnitedHealth Group's Medicare billing practices sent both the insurance world and financial markets into a tizzy. The Medicare Advantage plans appear to be the focus of the DOJ's probe.
Already dealing with other legal challenges, UnitedHealthcare now finds itself in the spotlight of an investigation examining the billions of federal dollars paid for Medicare diagnoses and billing. If the Justice Department finds UnitedHealthcare at fault, tremendous fines may be in the insurer's future.
In Sickness and in Health Care
Under the Medicare Advantage (Plan C) system, insurers oversee the Medicare benefits of their enrollees. They receive lump sum payments from the federal government to cover the medical costs. Certain ailments receive higher payments, so it's advantageous for insurers to diagnose patients for as many conditions as possible.
Given the motivation to bill as many of the more lucrative diagnoses possible, the system seems designed to encourage rather than prevent billing fraud. The amount of money available serves as an extreme enticement to stretch the rules.
The Justice Department's latest investigation into UnitedHealthcare is focused on examining the practices used to make diagnoses to determine if the insurer is trying to trigger extra payments to both its Medicare Advantage programs and the physician groups that belong to the company.
Allegations of fraud issues surrounding Medicare billing practices surfaced through investigations by the Wall Street Journal in 2024. UnitedHealthcare was already on the radar of the Justice Department under the Biden administration's crackdown on antitrust activities that also targeted Apple, Amazon, and Google (Alphabet).
This is not the only investigation or legal action currently going on between the Justice Department and UnitedHealthcare. An antitrust probe was launched in February 2024, and a lawsuit was filed by the DOJ to block UnitedHealth Group's acquisition of Amedisys, a home health company, on antitrust grounds.
There's a New Sheriff in Town
UnitedHealthcare issued a statement condemning the reporting by the Wall Street Journal as misinformation that is "outrageous and false." The number of Medicare patients receiving healthcare through Medicare Advantage has risen from 10% to 54% over the past 15 years. UnitedHealthcare is one of the biggest players in the field, with over 90,000 doctors working for them.
These are certainly tumultuous times for UnitedHealthcare. Sadly, in December 2024, Brian Thompson, the company's CEO, was shot and killed on the streets of New York. His alleged attacker etched words onto the side of the bullet casings that indicated the attack stemmed from the company denying healthcare.
UnitedHealthcare also faces uncertainty with the Department of Justice under Trump, which has had a chaotic beginning. President Trump has asked the DOJ to let go all U.S. attorneys appointed under Biden, which could affect the DOJ's priorities. If that occurs, investigating UnitedHealth Group's Medicare Advantage Plan may not move forward. For now, however, the investigation appears to be ongoing.
Related Resources
- Healthcare Law (FindLaw's Heathcare Law Section)
- How To Pick a Medicare Advantage Plan (FindLaw's Medicare and Medicaid Law)
- What Is Antitrust Law and Trade Regulation? (FindLaw's Learn About the Law)
