(Reuters) – The U.S. Department of Justice is carrying out a criminal investigation into UnitedHealth Group for possible Medicare fraud, the Wall Street Journal reported on Wednesday.
UnitedHealth said it had not been notified by the DOJ about the “supposed criminal investigation reported,” and the company stood by “the integrity of our Medicare Advantage program.” The stock fell 8% in after-hours trade following the report.
The health insurer has been under pressure for months. On Tuesday, UnitedHealth Group’s CEO, Andrew Witty, stepped down unexpectedly, and the company simultaneously suspended its 2025 financial forecast due to rising medical costs. The announcement sent shares plunging nearly 18% to a four-year low.
Stephen Hemsley, who led the company for more than a decade until 2017, is taking back the reins following setbacks including the December murder of Brian Thompson, the CEO of its insurance unit, which catapulted UnitedHealth into the public consciousness.
The DOJ’s healthcare-fraud unit is overseeing the criminal investigation, which focuses on the company’s Medicare Advantage business practices, the Journal reported, citing people familiar with the matter.
While the exact nature of the potential criminal allegations against UnitedHealth is unclear, it has been an active probe since at least last summer, the newspaper said.
A DOJ spokesperson declined to comment to the Journal about the fresh criminal probe. The department did not immediately respond to Reuters requests for comments.
Last week, UnitedHealth said in a regular filing that it had been “involved or is currently involved in various governmental investigations, audits and reviews,” without disclosing further details.
In February, the Journal reported a civil fraud investigation into UnitedHealth’s Medicare practices. The company had then said that it was unaware of any new probe.
In the same month, U.S. Senator Chuck Grassley launched an inquiry into UnitedHealth’s Medicare billing practices, requesting detailed records of their compliance program and other related documents. UnitedHealth shares are down about 40% for the year.
The new investigation follows broader scrutiny into the Medicare Advantage program.
The DOJ earlier this month filed a lawsuit accusing three of the largest U.S. health insurers of paying hundreds of millions of dollars in kickbacks to brokers in exchange for steering patients into the insurers’ Medicare Advantage plans.
Nearly half of the 65 million people covered by Medicare, the U.S. program for people aged 65 and older or with disabilities, are enrolled in Medicare Advantage plans run by private insurers.
The insurers are paid a set rate for each patient, but can be paid more if patients have multiple health conditions.
Standard Medicare coverage is managed by the government.
(Reporting by Bipasha Dey, Kanjyik Ghosh and Mrinmay Dey in Bengaluru; Additional reporting by Gnaneshwar Rajan in Bengaluru; Editing by Arun Koyyur and Stephen Coates)
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