United Healthcare in the Hot Seat With Medicare Fraud Investigation

By The Blog Source

The Department of Justice has opened a criminal investigation against UnitedHealth Group (UNH) for alleged Medicare fraud involving its Medicare Advantage business. The investigation, which joins a number of civil and antitrust inquiries, represents a major increase in federal monitoring of the biggest health insurer in the country.

Since at least the summer of 2024, DOJ's criminal healthcare fraud team has been looking into UnitedHealth. The focus of the investigation is Optum's diagnostic coding and Medicare Advantage billing procedures. Following the inquiry, the removal of the CEO, and general financial instability, UnitedHealth's shares have fallen by almost 50%.

A criminal investigation has been opened by the Department of Justice into UnitedHealth Group's Medicare Advantage operation, with an emphasis on possible fraud that might have resulted in public overpayments of billions of dollars. The investigation is being led by the DOJ's healthcare-fraud branch, which has its headquarters in Washington but works out of its New York office, according to sources the Wall Street Journal cited. UnitedHealth says it has not received official notice from the DOJ, and the federal government has not publicly acknowledged the inquiry.

UnitedHealth is already under legal pressure from a civil inquiry into Medicare billing methods and continuing antitrust investigations, which are exacerbated by this most recent criminal investigation. The business has called earlier rumors of fraud probes "misinformation" and denied any wrongdoing. However, internal records present a different picture. Attorneys for the corporation acknowledged federal interest in Optum's coding procedures, an arm of the business in charge of diagnosing and recording patient illnesses under Medicare Advantage plans, according to an email from March 11 that was made public in an investor lawsuit.

Because Medicare Advantage insurers, like UnitedHealth, are paid more for patients with complex or serious medical conditions, the stakes are especially high. According to investigative research, UnitedHealth allegedly inflated the number of seriously ill patients using dubious diagnostic procedures to artificially increase revenue. Lawmakers and analysts continue to voice concerns despite UnitedHealth's denials that these allegations are biased and erroneous.

The second term of President Trump is indicating a significant change in the way federal healthcare spending is monitored. During his Senate confirmation hearing earlier this year, Mehmet Oz, who was confirmed as the new director of the Centers for Medicare & Medicaid Services (CMS), promised to take strong action against abuse. Following a Wall Street Journal exposé that sparked calls for increased accountability among Medicare Advantage insurers, that hearing was held.

UnitedHealth is reeling from an unusual leadership change at the time of the crisis. This week, former CEO and current board chairman Stephen Hemsley abruptly replaced CEO Andrew Witty. Nearly half of the company's market value has been lost in the past month due to the stock slide, which has been fueled by growing investigations, poor financial performance, and general worries about trust in corporate governance.

The DOJ has previously had difficulty holding UnitedHealth responsible. For years, a different civil whistleblower action that claimed $2 billion in incorrect billing was pending. A court-appointed special master recommended dismissal in March 2025, stating that there was insufficient evidence to support the company's submission of falsified diagnoses. The DOJ has requested that the presiding court dismiss that suggestion.

"UNH has been in the media and legislative spotlight for some time due to its market dominance, aggressive marketing of Medicare Advantage, and questionable use of AI algorithms to deny care to patients," said Timnit Ghermay, director of the Northwest Coalition for Responsible Investment, in a news release announcing the request on Wednesday. Public frustration over the high expenses and limited access to healthcare has escalated to a dangerous level in our nation, as demonstrated by the terrible murder of UNH's Brian Thompson.

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