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The US Department of Justice is examining UnitedHealth’s large Medicare Advantage unit at a time when the group is facing an antitrust enquiry.
The justice department is examining how the insurer’s methods of recording patient diagnoses could result in excess payments to UnitedHealth’s Medicare Advantage plans, a privately run offshoot of the government-backed health insurance programme, said people familiar with the matter.
UnitedHealth’s stock fell about 9 per cent in New York trading after the Wall Street Journal first reported on the probe.
UnitedHealth said it was unaware of any new investigation. The company is facing an antitrust investigation over its status as the country’s biggest health insurer.
It covers about 50mn Americans with businesses throughout the healthcare supply chain. UnitedHealth’s $3.3bn acquisition of homecare business Amedisys has also been delayed by an antitrust lawsuit.
The Minneapolis-based company said “the government regularly reviews all [Medicare Advantage] plans to ensure compliance and we consistently perform at the industry’s highest levels on those reviews”.
Some 9.5mn patients are covered under the Medicare Advantage plan, which differs from traditional government-backed Medicare plans and is run by private insurers under a managed care model. It is among the most profitable lines of business for health insurance companies.
Shares in some of the company’s rivals also fell following the report. Elevance Health was down 1.5 per cent while CVS Health was down 1.7 per cent.
Scott Fidel, an analyst at investment bank Stephens, said: “[Medicare Advantage] coding practices are a perennial source of historical contention between the industry and regulators”, with Cigna and Elevance facing justice department lawsuits about coding practices in recent years.
“The investigation’s initial launch seems to overlap with [Joe Biden’s] DoJ,” Fidel said. “The question is how vigorously [Donald] Trump’s DoJ will continue to pursue the case. However, the subject of fraud/waste/abuse is a prime area of Doge’s [Department of Government Efficiency] interest.”
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