The US Department of Justice (DOJ) is conducting a criminal investigation into the UnitedHealth Group regarding possible Medicare fraud.
The Wall Street Journal (WSJ) first broke the story on Wednesday.
UnitedHealth said the company had not been notified by the DOJ about “presumably reported criminal investigations” and that it supported “the integrity of the Medicare Advantage program.”
The DOJ Healthcare Fuller Unit oversees a criminal investigation focused on the company’s Medicare Advantage business practices, the WSJ reported, citing people familiar with the issue.
The exact nature of the potential criminal claim against UnitedHealth is unknown, but it has been an active investigation, at least since last summer, the newspaper said.
A DOJ spokesperson declined to comment to WSJ about the fresh crime investigation. The department did not immediately respond to a request for comment from Reuters news agency.
Last week, UnitedHealth said in a regular submission, without giving details, “either they are involved or are currently involved in various government investigations, audits and reviews.”
The new research follows a broader scrutiny of the Medicare Advantage program. The Medicare Advantage Program covers plans from private companies that are approved by Medicare by supplementing regular Medicare for Americans over the age of 65 to cover services that are not government-only plans, such as dentistry and vision services.
In February, the WSJ reported a civil fraud investigation into UnitedHealth’s Medicare practices. The company has since said it was unaware of the new probe.
In the same month, Iowa Sen. Chuck Grassley launched an investigation into UnitedHealth’s Medicare claims practices and requested detailed records of the company’s compliance program and other related documents.
Earlier this month, the DOJ filed a lawsuit accusing three of the largest health insurance companies in the United States of America, paying a broker hundreds of millions of dollars in kickbacks to pilot patients into insurance companies’ Medicare Advantage Plans.
Almost half of the 65 million people eligible for Medicare, a US program for those over 65 years old or disabled, are enrolled in the Medicare Advantage Plan, run by private insurance companies.
Insurance companies are paid a set fee for each patient, but can pay more if the patient has multiple health conditions. Standard Medicare coverage is governed by the government.
Brewing confusion
Health insurance companies have been under pressure for months. On Tuesday, UnitedHealth Group CEO Andrew Witty unexpectedly resigned, simultaneously halting its 2025 financial forecast due to rising health costs, causing a 18% drop in stocks to a four-year low.
Stephen Hemsley, who led the company for over a decade until 2017, reclaimed the reins following a set-off that included the December murder of insurance unit CEO Brian Thompson, bringing United Health into public consciousness.
On Thursday, UnitedHealth Group shares plummeted 18% to a five-year low after the news of the probe broke.
“The stocks are already in the kennels with investors, and the additional uncertainty is just piling up,” James Harlow, senior vice president of Novare Capital Management, who owns UnitedHealth’s shares, told news agency Reuters.
If the loss is reached, UnitedHealth will be the worst-performing stock on the S&P 500 Index in two of the last three days.
The last month’s sale wiped out nearly $300 million from UnitedHealth’s market capitalization. The stock reached record highs in November, wiping out more than half of its value.