New York: The U.S. Department of Justice (DOJ) has launched a criminal investigation into UnitedHealth Group (UNH.N) over potential Medicare fraud, according to a report by the Wall Street Journal on Wednesday.
UnitedHealth responded by stating it had not received any official notification from the DOJ regarding the “supposed criminal investigation reported,” and reaffirmed its confidence in “the integrity of our Medicare Advantage program”. Following the news, UnitedHealth’s stock dropped 8% in after-hours trading.
The health insurer has been under intense scrutiny in recent months. On Tuesday, UnitedHealth’s CEO, Andrew Witty, abruptly resigned, and the company simultaneously withdrew its 2025 financial outlook citing rising medical costs. This announcement triggered a nearly 18% plunge in shares, marking a four-year low.
Stephen Hemsley, who served as CEO for over a decade until 2017, has stepped back in to lead the company amid several challenges, including the high-profile December murder of Brian Thompson, CEO of UnitedHealth’s insurance unit, which thrust the company into the spotlight.
The DOJ’s healthcare-fraud unit is overseeing the ongoing criminal investigation, focusing on UnitedHealth’s Medicare Advantage business practices, sources familiar with the matter told the Journal.
While the precise details of the potential criminal charges remain unclear, the investigation has been active since at least last summer, the report noted.
A DOJ spokesperson declined to comment to the Journal regarding the new probe, and the department has not yet responded to Reuters’ requests for comment.
In a recent regulatory filing, UnitedHealth disclosed it had been “involved or is currently involved in various governmental investigations, audits and reviews,” without providing further specifics.
Earlier this year, in February, the Wall Street Journal reported a civil fraud investigation into UnitedHealth’s Medicare practices, to which the company then responded that it was unaware of any new investigations.
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Additionally, U.S. Senator Chuck Grassley initiated an inquiry in February into UnitedHealth’s Medicare billing practices, demanding detailed records on their compliance programs and related documents. Year-to-date, UnitedHealth shares have declined by about 40%.
This latest criminal probe is part of a broader crackdown on the Medicare Advantage program.
Earlier this month, the DOJ filed a lawsuit accusing three major U.S. health insurers of paying hundreds of millions of dollars in kickbacks to brokers, in exchange for directing patients into the insurers’ Medicare Advantage plans.
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Nearly half of the 65 million Medicare beneficiaries—those aged 65 and older or with disabilities—are enrolled in Medicare Advantage plans managed by private insurers.
While insurers receive a fixed payment per enrollee, they can earn additional funds when patients have multiple health conditions.
In contrast, standard Medicare coverage is directly managed by the government.
