UnitedHealth is currently under investigation by the Department of Justice for suspected fraudulent activities that may have led to significant financial losses for the government.
The investigation specifically focuses on the company’s alleged fraudulent billing practices, which are believed to have resulted in the misrepresentation of diagnoses to increase payments from Medicare Advantage plans.
According to a report by the Wall Street Journal, UnitedHealth has received millions of dollars from Medicare based on potentially unreliable or exaggerated diagnoses in recent years.
In Medicare Advantage, private insurers receive fixed payments from the federal government to manage the Medicare benefits of enrolled individuals.
These payments increase when patients are diagnosed with rare or hard-to-treat conditions, encouraging insurers to record more profitable health issues.
UnitedHealth Group shares tumbled on Friday with the news of the civil fraud investigation. Shares of other prominent Medicare Advantage insurers like Humana were down as well.
News of the investigation and subsequent financial hit comes less than three months after UnitedHealthcare CEO Brian Thompson was gunned down on a Manhattan street.
The Justice Department has initiated a broad fraud investigation into insurance giant UnitedHealth, accusing the company of deceiving the government out of millions by covering questionable diagnoses
For its part, UnitedHealth maintains its innocence: ‘Any suggestion that our practices are fraudulent is outrageous and false.’
This is not the only legal tangle with the government that UnitedHealth has recently found itself in.
Last year, the DOJ also sued to prevent the healthcare conglomerate from acquiring home health services provider Amedisys Inc. for $3.3 billion.
Additionally, the DOJ has an ongoing lawsuit against UnitedHealth regarding Medicare Advantage, which is set to go to trial in October.
UnitedHealth, a $400 billion company that owns the largest U.S. health insurer and a sprawling network of other health-industry assets, also covers more than 7.8 million people as the nation’s largest provider of Medicare Advantage plans
The Wall Street Journal’s ongoing reporting has revealed what the DOJ now sees as a concerted effort by insurers to defraud the government.
However, the DOJ has not revealed the amount of money it believes has been wrongfully doled out.
A WSJ analysis of Medicare records revealed significant increases in profitable diagnoses for patients seen by doctors employed by UnitedHealth after they joined the company’s Medicare Advantage plans.
UnitedHealth operates the nation’s largest health insurer, UnitedHealthcare, which covers over 49 million Americans
Doctors claimed that UnitedHealth, based in Minneapolis, trained them to document diagnoses that would generate revenue, including some that seemed irrelevant or unclear.
According to the doctors who spoke with the Journal, the company also used software to suggest conditions and offered bonuses for considering these suggestions.
Additionally, last summer, the Journal reported that UnitedHealth added diagnoses for conditions not treated by any doctor, resulting in an extra $8.7 billion in federal payments in 2021.
These diagnoses were linked to sources like in-home visits by nurses from UnitedHealth’s HouseCalls unit, which generated an average of $2,735 in additional federal payments from 2019 to 2021.
UNH shares dropped 8.7 percent on Friday, bringing its weekly decline to over 12 percent. The stock is now on track to experience its worst daily and weekly performance since 2020.
The company said: ‘The Wall Street Journal continues to report misinformation on the Medicare Advantage (MA) program.
‘The government regularly reviews all MA plans to ensure compliance and we consistently perform at the industry’s highest levels on those reviews.’
In a further jab at the Journal’s reporting, UNH said: ‘We are not aware of the “launch” of any “new” activity as reported by the Journal.
The company has lost some of its footing since the shocking shooting death of former CEO Brian Thompson on December 4. The current stock price is about $458 per share. On the day of Mr Thompson’s murder, it was $610
‘We are aware, however, that the Journal has engaged in a year-long campaign to defend a legacy system that rewards volume over keeping patients healthy and addressing their underlying conditions.’
The company has lost some of its footing since the shocking shooting death of former CEO Brian Thompson on December 4.
The company has lost some $63 billion in value since then, and the price of shares has dropped by roughly $100. The current stock price is about $458 per share. On the day of Mr Thompson’s murder, it was $610.
UnitedHealth operates the nation’s largest health insurer, UnitedHealthcare, which covers over 49 million Americans.
It also oversees a pharmacy benefit manager that manages prescription medicine coverage and has other lucrative assets.
James Harlow, senior vice president at Novare Capital Management, said: ‘Investors are selling because it creates an unknown that is hard to quantify – its impossible to truly know at this point how the investigation will unfold and what the ultimate impact will be on UNH’s profitability.’
