Justice Department Launches Criminal Investigation
UnitedHealth Group is under investigation by the U.S. Department of Justice for potential Medicare billing fraud. The insurer disclosed in a regulatory filing that the DOJ’s healthcare fraud unit has issued both civil and criminal inquiries following a series of reports about its billing practices. Shares of UnitedHealth fell 4.7% after the disclosure.
The probe centers on the company’s role in the Medicare Advantage system, where private insurers are paid to provide care in place of traditional Medicare. According to reports, UnitedHealth and other insurers allegedly inflated payments by adding inaccurate diagnoses to patient profiles, sometimes without physician confirmation.
Insurer Responds With Internal Review
UnitedHealth stated it has launched a third-party review of its risk assessment coding, managed care practices, and pharmacy services. “The company has full confidence in its practices and is committed to working cooperatively with the Department throughout this process,” it said in a statement.
The Wall Street Journal, which first exposed the billing strategies in December 2024, highlighted several tactics that generated billions in Medicare overpayments. These revelations appear to have prompted the ongoing federal scrutiny, which reportedly began in mid-2024.
Ongoing Turmoil at the Executive Level
This investigation follows a year of leadership crises and market volatility. In May 2024, a pension fund filed a lawsuit accusing former CEO Brian Thompson and other executives of insider trading. The lawsuit alleges they sold over $100 million in stock after learning of the antitrust probe but before disclosing it publicly.
In December 2024, Thompson was fatally shot on the morning of the company’s annual investor meeting, a tragedy that further damaged public perception. Widespread criticism had already emerged over the company’s handling of insurance claims, with many accusing it of prioritizing profit over care.
Financial Hits and Forecast Withdrawals
UnitedHealth has struggled to reassure investors. In early 2025, the company missed earnings estimates and saw its medical care ratio spike. A first-quarter report revealed a sharp drop in adjusted earnings guidance, triggering a 22% stock plunge — its worst daily loss since 1998.
CEO Andrew Witty stepped down shortly thereafter, and founder Stephen Helmsley returned as CEO with a $60 million stock package. However, the company’s outlook continued to deteriorate. It suspended its annual forecast, and shares dropped another 16%.
In June, a leaked internal memo to STAT News revealed talking points about using AI models to deny claims, fueling fresh controversy. These developments have intensified scrutiny over UnitedHealth’s operational transparency and its role in Medicare Advantage billing.
