The US Department of Justice is reportedly investigating the insurance giant UnitedHealthcare for its Medicare billing practices.
The federal government is examining whether UnitedHealthcare is using patient diagnoses to illegally increase the lump sum monthly payments received through the Medicare Advantage program, according to a report in the Wall Street Journal.
Although it is best known for its insurance operations, UnitedHealthcare is one of the largest corporations in the world with a $457bn market capitalization. Its businesses touch health technology, pharmacy benefits and physician practices.
The company is so large that one industry analyst estimated 5% of US gross domestic product flowed through its infrastructure each day. It is the largest employer of doctors in the US with more than 90,000 physicians in 2023, or nearly one in 10 American doctors.
According to the report, the justice department is now conducting a civil fraud investigation.
Medicare is a public health insurance program for the elderly and disabled that covers more than 65 million Americans. About half of those beneficiaries use Medicare Advantage plans – a program started by Congress to allow private insurers to manage beneficiaries’ care.
At the time it was created, during the George W Bush administration, supporters argued private corporations would be able to more efficiently provide the same services as government and save taxpayers money.
However, a raft of studies now show the program probably costs taxpayers billions more each year. A study by the Medicare Payment Advisory Commission (Medpac) found that in 2024 alone, Medicare Advantage plans probably cost taxpayers $83bn (22%) more than traditional Medicare.
Further, an increasing number of patients have complained about how the program makes it difficult to access care, for example by requiring patients to seek permission, or “prior authorization”, from insurers before treatment.
The investigation into UnitedHealthcare is being carried out by the Department of Justice’s civil fraud division and the Department of Health and Human Services office of the inspector general, the journal reported. The investigation is separate from an ongoing Department of Justice antitrust inquiry.
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The enormous company has come under scrutiny for other parts of its business as well. UnitedHealth Group owns Change Healthcare, a technology company that facilitates as much as one-third of all payments from insurers to providers. A huge data breach in 2024 allowed hackers to “exfiltrate” as many as 85m patient records – the event was described by one analyst as healthcare’s “Deepwater Horizon moment”.
More scrutiny of the company was brought by the murder of UnitedHealthcare’s CEO, Brian Thompson. The killing of the executive described as a kind family man was met with apathy and derision from the American public, who described routinely being denied healthcare.
UnitedHealth’s stock declined 10% in early morning trading on the news. Neither the justice department nor UnitedHealth responded to requests for comment from Reuters. UnitedHealth did not immediately respond to a request for comment from the Guardian.
Article by:Source: Jessica Glenza
