UnitedHealthcare Under DOJ Scrutiny Over Billing Practices \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ UnitedHealth Group confirmed it is cooperating with federal investigations into its Medicare Advantage billing practices. The probes—both criminal and civil—focus on whether the company inflated diagnoses to increase government payouts. UnitedHealth maintains its confidence in compliance and transparency as the stock continues to decline.
Quick Looks
- UnitedHealth says it’s working with the Department of Justice on ongoing investigations.
- Civil and criminal probes center on its Medicare Advantage billing practices.
- Allegations include manipulating diagnoses to secure higher payments.
- UnitedHealthcare is the largest provider of Medicare Advantage, with over 8 million members.
- The Wall Street Journal reported DOJ investigations starting in February 2025.
- Reports claim doctors and nurses were used to inflate diagnostic data.
- UnitedHealth claims “full confidence” in its business practices.
- The company earned over $400 billion in 2024 and ranked third on the Fortune 500.
- A sharp decline in share value followed executive turmoil and rising health care costs.
- CEO Brian Thompson was fatally shot in December 2024; a suspect has been charged.
- The company dropped its earnings forecast amid surging Medicare-related expenses.
- Shares fell another 3% on Thursday, now down over 55% from 2024 highs.
- UnitedHealth will report Q2 earnings next Tuesday.
Deep Look
UnitedHealth Group Inc., one of the most dominant players in the U.S. health care system, is now facing a high-stakes legal and public relations challenge as it confirms its involvement in both civil and criminal federal investigations. These investigations center on its handling of Medicare Advantage billing practices, a cornerstone of its lucrative insurance business.
The company disclosed in a Securities and Exchange Commission (SEC) filing that it had initiated contact with the Department of Justice (DOJ) following reports in The Wall Street Journal outlining active investigations. According to the filing, UnitedHealth expressed full confidence in its internal practices and compliance procedures, while also pledging full cooperation with federal authorities throughout the process.
Focus of the Investigation: Medicare Advantage Billing Practices
At the heart of the scrutiny is UnitedHealth’s Medicare Advantage (MA) division, operated under its UnitedHealthcare brand. The company is the largest provider of Medicare Advantage plans in the United States, covering over 8 million Americans—most of them seniors aged 65 and older. Medicare Advantage is a privatized version of the federal government’s Medicare program, and private insurers like UnitedHealth receive payments based on the health status and diagnoses of enrolled members.
According to investigative reports, federal authorities are examining whether UnitedHealth may have artificially inflated diagnostic codes to make patients appear sicker than they actually were. These diagnoses directly affect the amount of money the federal government reimburses insurance companies. By assigning more severe or numerous health conditions to patients, a provider can potentially receive higher payments from Medicare.
In February, The Wall Street Journal reported that a civil fraud investigation was underway, with anonymous sources suggesting the probe had been ongoing for months. The inquiry then reportedly evolved to include the DOJ’s criminal health care fraud unit, reflecting heightened concern about the potential scale and intent behind these practices.
Federal officials are believed to be focusing on how UnitedHealth employed physicians and nurses in an internal review process to collect patient data and confirm diagnoses that would increase the company’s reimbursement under Medicare Advantage. While these practices are not inherently illegal, the government is now questioning whether the methods were used ethically—or manipulated to gain an unfair financial edge.
UnitedHealth’s Public Defense and Corporate Position
UnitedHealth has been quick to defend its reputation, stating in the SEC disclosure that it “has a long record of responsible conduct and effective compliance.” It also emphasized its dedication to working “cooperatively” with investigators and maintained that its billing practices are consistent with federal regulations.
Still, the investigations pose serious risks—not only financially, but reputationally. As a massive publicly traded corporation with an extensive footprint in both insurance and care delivery, UnitedHealth’s credibility plays a central role in its ability to secure government contracts and partnerships.
The legal challenge also comes at a time of leadership instability and operational strain within the company. In December 2024, the organization was rocked by the tragic and unexpected death of UnitedHealthcare CEO Brian Thompson, who was fatally shot in Manhattan on the way to the company’s annual investor meeting. A man named Luigi Mangione has since been charged in connection with the killing, which garnered national attention and disrupted executive leadership just as regulatory scrutiny began to intensify.
Shareholder Woes and Financial Fallout
UnitedHealth’s stock performance has mirrored the growing unease. After reaching a historic peak of over $630 per share in November 2024, the company’s share price has suffered a dramatic reversal. As of Thursday afternoon, shares were trading at $281.78, representing a 55% decline from their all-time high. The stock dropped by over 3% in a single day—losing $10.73—reflecting shaken investor confidence.
Much of the stock’s downward trajectory can also be attributed to rising health care utilization, particularly within its Medicare Advantage business. In April 2025, UnitedHealth issued a warning to investors, cutting its financial forecast due to unexpectedly high medical costs. A wave of new MA enrollees had higher-than-expected utilization rates, raising concerns about the company’s ability to manage expenses and maintain profit margins.
A month later, then-CEO Andrew Witty resigned, intensifying uncertainty around the company’s future direction. UnitedHealth went on to withdraw its forward earnings guidance entirely, signaling that it lacked sufficient visibility to make accurate financial predictions amid the ongoing volatility and legal developments.
Medicare Advantage: A Business Model Under Scrutiny
The core issue in the investigation—billing practices tied to Medicare Advantage—is not unique to UnitedHealth. In recent years, federal officials have ramped up oversight of the entire MA program, citing growing concerns about how private insurers may be manipulating risk scores to maximize reimbursements. Several other health insurers have faced similar probes and lawsuits, suggesting that UnitedHealth’s case could set a precedent for how the government tackles MA fraud going forward.
Medicare Advantage is a crucial growth engine for UnitedHealth. The program accounts for billions in revenue and forms a central part of the company’s long-term strategy. By 2024, the company reported over $400 billion in revenue, making it the third-largest corporation in the U.S., according to the Fortune 500 list. As such, any disruption to its MA operations—whether through fines, settlements, or restrictions—could have significant ripple effects throughout the health care and insurance industries.
What’s Next? Upcoming Earnings and Federal Action
The company is slated to release its second-quarter earnings report next Tuesday, a closely watched event that could offer deeper insight into how UnitedHealth is weathering the storm. Analysts will be looking for information on the company’s legal strategy, internal audits, and any anticipated financial impact from the ongoing investigations.
Meanwhile, federal authorities have not provided public commentary on the scope or timeline of the case. If charges are filed or if the DOJ pushes for a settlement, it could mark one of the largest Medicare fraud cases in U.S. history, given UnitedHealth’s market size and influence.
In the meantime, UnitedHealth faces a long and uncertain road. The dual threat of criminal and civil investigations, executive instability, and operational strain has created a complex and volatile environment for one of the most powerful health care companies in the world.
How it navigates these challenges may well determine the future of not just UnitedHealth, but the broader Medicare Advantage system itself.
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