UnitedHealth Group’s inventory plunged Thursday morning after a report that the embattled insurance coverage large was being probed for Medicare fraud.
The Division of Justice has been conducting the felony investigation into whether or not the corporate — which pushed out CEO Andrew Witty on Monday — manipulated Medicare Benefit billing practices to improperly enhance federal funds by inflating affected person danger scores, the Wall Road Journal reported on Wednesday.
The existence of the probe, which started final 12 months however had not been beforehand disclosed, despatched shares of UnitedHealth plummeting 17% after the opening bell. Shares have fallen greater than 50% up to now month.
The investigation is being overseen by the DOJ’s felony healthcare fraud unit, with prosecutors primarily based in New York main the inquiry, sources informed the Journal.
UnitedHealth, which was rocked final 12 months by the execution-style killing of high govt Brian Thompson, stated it had not been notified of the investigation.
“We stand by the integrity of our Medicare Advantage program,” a spokesperson stated in a press release.
The Justice Division declined to remark. The Publish has sought remark from UnitedHealth.
The revelation provides to mounting scrutiny of the corporate, which was already dealing with civil and antitrust investigations.
Along with the CEO shake-up, UnitedHealth has been coping with the fallout of a cyberattack that disrupted funds to suppliers nationwide and Thompson’s killing.
Final December, the CEO of UnitedHealthcare, a subsidiary which sells medical insurance, was gunned down in Manhattan by alleged murderer Luigi Mangione.
In February, the Journal reported that UnitedHealth was underneath civil investigation for probably fraudulent Medicare billing practices at its Optum division.
On the time, the corporate dismissed the story as “misinformation” and stated it was unaware of any new probes.
Nonetheless, an inside March 11 e mail from a UnitedHealth lawyer, disclosed in a shareholder lawsuit, acknowledged that “the government has asked us some questions regarding Optum’s coding practices,” describing the inquiry as “in the early stages.”
The DOJ’s healthcare fraud unit, which historically centered on overbilling by suppliers, has in recent times shifted consideration to insurance coverage corporations administering Medicare Benefit plans.
These insurers are paid extra for overlaying sufferers with extra extreme circumstances, creating an incentive to report intensive diagnoses –typically dubiously.
UnitedHealth has pushed again towards allegations that it submitted inflated or unsupported diagnoses, calling such claims “inaccurate and biased.”
The corporate argues that Medicare Benefit delivers superior outcomes and decrease prices than conventional Medicare.
The corporate’s most up-to-date SEC submitting notes ongoing governmental audits and investigations however doesn’t explicitly point out the felony, civil or antitrust probes now underway.
UnitedHealth additionally faces a civil whistleblower lawsuit accusing it of submitting $2 billion value of diagnoses that inside audits discovered weren’t backed by medical data.
Whereas a court-appointed particular grasp just lately really useful dismissing the case because of inadequate proof, the DOJ has urged the decide to reject that advice.
UnitedHealth countered that the discovering reveals “there was no evidence to support the DOJ’s claims we were overpaid or that we did anything wrong.”
