TL/DR –
UnitedHealth Group, the largest health insurer in the US, is being investigated by the US Department of Justice over potential criminal Medicare fraud. The company’s shares fell by 16.5% following news of the investigation, and it has also suspended its full-year financial outlook due to higher-than-expected medical costs. Earlier this year, it was reported that a civil fraud investigation had been launched into UnitedHealth’s Medicare practices, and the company is facing an inquiry into its billing methods.
UnitedHealth Group Faces Criminal Investigation, Shares Plunge
UnitedHealth Group, the nation’s largest health insurer, is allegedly under investigation for potential criminal Medicare fraud, triggering a significant drop in share value. The US Department of Justice has reportedly been investigating the insurance behemoth since last summer, according to a Wall Street Journal report.
UnitedHealth’s stock plummeted by 16.5% in the early hours of Thursday trading in New York, intensifying an already harsh market downturn. The company’s market value has halved since the start of the year.
Earlier this week, UnitedHealth announced that its CEO, Andrew Witty, is stepping down due to personal reasons. This announcement came together with the suspension of its annual financial forecast due to higher-than-expected medical expenses.
The last few months have been challenging for UnitedHealth, beginning with the tragic murder of its executive Brian Thompson in December.
Medicare, a US government-funded health insurance program for the elderly and disabled, works with Medicare Advantage, where private health insurers contract with Medicare to provide health benefits. UnitedHealth denies any misconduct in their Medicare Advantage program.
The justice department has yet to respond to requests for comment. Earlier this year, UnitedHealth faced a civil fraud investigation into its Medicare practices, while Senator Chuck Grassley initiated an investigation into the company’s billing procedures, demanding comprehensive compliance records.
UnitedHealth has thrived for years due to its dominance in insurance and expansion in the Medicare marketplace, a government program that covers medical costs for senior citizens.
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