On Thursday, UnitedHealth Group confirmed that it has begun to address requests from both civil and criminal investigators linked to the Justice Department. This comes in response to media reports highlighting investigations into the company’s Medicare services.
This announcement follows a wave of coverage by the Wall Street Journal in recent months that has shed light on ongoing investigations by the Justice Department. The latest piece mentioned that the criminal healthcare-fraud unit is looking into how UnitedHealth managed the hiring of medical personnel to obtain diagnoses that could potentially enhance payment claims.
In its recent securities filing, UnitedHealth indicated it has reached out to the Justice Department regarding these allegations and affirmed, we have now started obeying formal criminal and civil inquiries from the agency. The company also expressed its unwavering confidence in its practices and assured stakeholders of its commitment to cooperating throughout this process.
This confirmation marks the first publicly acknowledged evidence of the investigations by UnitedHealth. However, they did not disclose the timeline of the Justice Department’s requests.
Interestingly, this news arrives just ahead of UnitedHealth’s second-quarter financial results announcement scheduled for July 29. The company’s recently reinstated CEO, Stephen Hemsley, who took charge again amid financial pressures and a drop in stock prices, is expected to clarify the company’s financial outlook and future strategy for investors.
Following the announcement, UnitedHealth’s shares experienced a drop of over 3% during early trading hours on Thursday.
In the past, UnitedHealth has refuted the accuracy of the Wall Street Journal’s reports regarding the investigations, labeling them as misinformation and even deeply irresponsible via communications on their official site.
Earlier in May, when the Journal noted that the Justice Department’s criminal health-fraud division was monitoring UnitedHealth’s Medicare division from alleged activities dating back to last summer, UnitedHealth claimed ignorance of any such probing.
Furthermore, in July, reports surfaced hinting that former employees of UnitedHealth were questioned by attorneys associated with the healthcare-fraud unit, with participation from representatives of the Federal Bureau of Investigation and the Health and Human Services Inspector General’s Office noted during those discussions.
Moreover, separate articles from February indicated that the Justice Department initiated an independent civil fraud investigation scrutinizing how the company documents diagnoses—a claim that UnitedHealth denied knowing about.
In March, a UnitedHealth attorney hinted to a former staff member about certain inquiries from the government relating to Optum’s coding standards. Optum is linked to UnitedHealth’s healthcare delivery system where doctors are employed. This correspondence emerged during a lawsuit concerning allegations leveled by a UnitedHealth investor that the company misled its shareholders.
Later in May, when approached regarding this correspondence, a company spokesperson reaffirmed UnitedHealth’s previous position of having no knowledge of the probe.
Despite the turbulence, a spokesperson expressed that UnitedHealth welcomes routine evaluations of its policies and directly engages with related government entities instead of media channels. They also plan to implement a consistent independent third-party inspection and audit routine regarding their diagnosis-detection methods.
The investigations from the Justice Department align with subjects raised in a series of Journal articles over the past year, which have been critically analyzing some of UnitedHealth Group’s dealings within the Medicare sector.
The Journal has revealed allegations that UnitedHealth, alongside other Medicare Advantage insurers, submitted additional diagnoses that artificially inflated Medicare payments. Notably, some claims pertained to conditions patients had either not ever received treatment for or had already recovered from.
The analysis further suggested that UnitedHealth’s reimbursements per patient significantly surpassed those received by other competitors within the Medicare Advantage program, based on Medicare data evaluations.
Additionally, investigations have touched upon the company’s propensity to acquire medical services and actively propose extra diagnoses aimed at increasing reimbursement amounts to employed physicians.
According to reports, more than seven healthcare professionals formerly associated with UnitedHealth, referred to in previous Journal publications, have been approached for interviews by investigators delving into these criminal and civil inquiries.
In defense of its practices, UnitedHealth maintains that their methodologies enable earlier detection of health issues, thereby benefiting both savings within the healthcare framework and implications for patient care. They posit that Medicare Advantage has the potential to enhance health outcomes while cutting down costs.
If you have insights or comments regarding this event, you can reach out to Christopher Weaver at Christopher.Weaver@wsj.com, Anna Wilde Mathews at Anna.Mathews@wsj.com, and Denny Jacob at denny.jacob@wsj.com.
