UnitedHealth Group, the largest private health insurer in the United States, is under scrutiny as the Justice Department launches an investigation into its Medicare billing practices. This civil probe, distinct from an ongoing antitrust investigation by the same department, examines how UnitedHealth records diagnoses to secure additional payments for its Medicare Advantage plans. The announcement of this investigation has significantly affected the company's market performance, causing a pre-market slide of about 11.5% in its shares.
The investigation seeks to evaluate the protocols UnitedHealth employs for billing Medicare. These protocols involve recording specific diagnoses that can lead to enhanced payments, a practice that has attracted the attention of federal authorities. While the investigation is civil in nature, it adds to the growing list of challenges facing the health insurance titan.
UnitedHealth's shares have experienced a downturn, falling approximately 4% this week. The company’s year-to-date stock performance has now dipped into negative territory. The latest development has also impacted broader market indicators, contributing to a decline of nearly 200 points in Dow Jones Industrial Average futures.
This probe is just one of several high-profile issues UnitedHealth is contending with. Last year, during the company's investor day, a gunman tragically killed Brian Thompson, then-CEO of UnitedHealth's insurance unit, in New York City. This incident shocked the financial and healthcare communities and highlighted security concerns within corporate events.
In addition to the Medicare billing practices investigation, UnitedHealth is embroiled in an antitrust legal battle with the Justice Department over its attempt to acquire Amedisys, a home health firm. The department filed a lawsuit to block this acquisition on antitrust grounds, citing potential negative impacts on competition within the healthcare sector.