UnitedHealth stock drops after company confirms DOJ investigation into Medicare billing practices
UnitedHealth (UNH) stock fell as much as 2% early Thursday after the insurance giant disclosed in a regulatory filing Thursday morning that it is facing an investigation from the Department of Justice into its Medicare billing practices.
Following news reports from The Wall Street Journal about insurance billing techniques used by UnitedHealth and other large medical insurers, the Justice Department's healthcare fraud unit began making criminal and civil requests of the company, according to the filing.
The health insurance giant has been facing a probe from the Justice Department into possible Medicare fraud since at least the summer of 2024, according to The Wall Street Journal's reporting.
"The Company has full confidence in its practices and is committed to working cooperatively with the Department throughout this process," UnitedHealth said in its disclosure. "The Company has a long record of responsible conduct and effective compliance."
The insurer also said it has "proactively launched its own initiative to conduct third party reviews of policies, practices, and associated processes and performance metrics for risk assessment coding, managed care practices, and pharmacy services."
The Wall Street Journal's reporting, first published in December 2024, documented several ways in which United and other major insurers have received billions of dollars in extra payments from the federal Medicare Advantage system, which allows approved private companies to provide health benefits in lieu of the federally managed Medicare system.
Insurance companies tacked on extra, and sometimes incorrect, diagnoses to patient profiles when those rulings had not been made by the doctors actually treating the patients, allowing the insurers access to extra payouts from the Medicare program, according to The Wall Street Journal's reporting.
UnitedHealth has been under pressure since the December shooting of Brian Thompson, CEO of its UnitedHealthcare unit.
In April, the company's first quarter earnings report sent shares down over 22%, its worst single-day performance since 1998. The next month, UnitedHealth's CEO Andrew Witty abruptly stepped down while the company pulled its annual forecast.
Shares of the insurance giant are down almost 50% over the last year.
Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.co
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