UnitedHealth Group has disclosed that it is under both criminal and civil investigation by the Department of Justice regarding its Medicare Advantage operations. The company stated in a filing with the Securities and Exchange Commission that it is cooperating and has already started responding to requests from federal investigators.
“(UnitedHealth) has a long record of responsible conduct and effective compliance,” the company noted in its SEC filing.
The announcement triggered a 2 percent decline in stock value, dropping $6.13 to $286.50 on Thursday morning.
The Department of Justice’s focus centers on how UnitedHealthcare documents patient diagnoses under its Medicare Advantage (MA) plans, which could lead to inflated federal payments. Earlier this year, The Wall Street Journal reported that federal officials had begun a civil fraud probe into the same issue. UnitedHealthcare covers over 8 million Americans through its Medicare Advantage plans, making it the largest provider in the country. The segment has been financially stressed in recent quarters due to rising healthcare utilization and government payment rate adjustments.
UnitedHealthcare initially denied knowledge of any new investigation activity back in February when media reports first surfaced. However, the company has since reached out to federal authorities after conducting its own internal review of those media claims.
Beyond health insurance, UnitedHealthcare runs a wide-ranging business empire, including a major pharmacy benefits manager and the rapidly expanding Optum unit, which delivers healthcare and technology services.
The investigation is another blow for the company, whose stock has been under pressure since December when UnitedHealthcare CEO Brian Thompson was fatally shot in New York City.
