A probe into UnitedHealth’s Medicare billing processes in recent months has begun, the Wall Street Journal reported Friday, pushing the healthcare conglomerate’s shares nearly 12 percent lower.
The civil fraud investigation, conducted by the Department of Justice (DoJ), is examining the company’s practices for recording diagnoses that trigger extra payments to its Medicare Advantage plans, the newspaper set out, citing people familiar with the matter.
Reuters reports UnitedHealth said the report contained “misinformation” about its Medicare Advantage plans, pointing to regular reviews by the government to ensure compliance.
The healthcare giant was also unaware of the launch of any new activity by the regulator, it said in a statement.
Demonstrators across from Manhattan Criminal Court during the arraignment of Luigi Mangione, the suspect in the killing of a UnitedHealth Group Inc. chief executive officer Brian Thompson, in New York, US, on Monday, Dec. 23, 2024. (Michael Nagle/Bloomberg via Getty)
The DoJ did not immediately respond to Reuters requests for comment.
Medicare Advantage plans are offered by private insurers who are paid a set rate by the U.S. government to manage healthcare for older adults looking for extra benefits not covered by regular Medicare.
Shares of other health insurers such as Humana and CVS Health also fell between three percent and four percent in early trading as the report underscored growing scrutiny into the health insurance sector.
“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,” said James Harlow, senior vice president at Novare Capital Management.
