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UnitedHealth Group Inc. faced a significant downturn on February 21, 2025, as its shares dropped by approximately 12% following reports of a civil fraud investigation initiated by the U.S. Department of Justice (DOJ).
The inquiry centers on the company’s Medicare billing practices, specifically examining allegations that UnitedHealth may be over-diagnosing conditions to secure higher reimbursements from its Medicare Advantage plans.
The DOJ is scrutinizing how UnitedHealth documents diagnoses, which could lead to increased payments from the government-run Medicare program.
This investigation has raised concerns about potential manipulation within the payment structure of Medicare Advantage, a privately managed alternative to traditional Medicare for seniors.
Sources familiar with the situation indicated that the investigation is particularly focused on practices within physician groups owned by UnitedHealth.
In premarket trading, UnitedHealth’s stock fell nearly 12%, contributing to a broader decline in the Dow Jones Industrial Average futures. The company’s shares were poised for their lowest opening since April of the previous year.
This decline reflects not only the immediate impact of the DOJ’s probe but also growing scrutiny over the healthcare giant’s operations amid calls for reform in Medicare billing practices.
UnitedHealth has previously criticized media reports regarding its Medicare Advantage program, claiming they misrepresent the complexities of the system.
The company has stated that such reporting demonstrates a lack of understanding of how Medicare Advantage operates, labeling it a “one-sided, biased attack” against its business practices.
This investigation adds to UnitedHealth’s challenges, as it is also facing an antitrust inquiry related to its proposed acquisition of home health company Amedisys.
The DOJ has expressed concerns regarding this acquisition, further complicating UnitedHealth’s operational landscape.
As the investigation unfolds, investors and analysts will be closely monitoring its implications for UnitedHealth’s financial health and reputation in the competitive healthcare market.
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