UnitedHealth Group’s (UNH) stock sank last month when it disclosed it was being investigated by the Department of Justice (DOJ) for “certain aspects” of the company’s handling of Medicare billing for patients.
The company insisted in its filing that it “has a long record of responsible conduct and effective compliance” and that independent audits “confirm that the Company’s practices are among the most accurate in the industry.”
But as it turns out, the DOJ criminal division’s scrutiny into the company’s corporate practices is not just limited to its handling of the Medicare program.
The probe also covers how UnitedHealth reimburses its doctors and its pharmacy benefit manager Optum Rx, according to Bloomberg.
Details of what specifically the DOJ is looking into are scarce, and the government has not accused the company of wrongdoing.But news of the expanded investigation into its business only complicates an already challenging year for UnitedHealth.
The company did not comment on the latest report, but instead directed Bloomberg to the statements it made in its July filing with the SEC.
UnitedHealth reported its first earnings miss in more than a decade back in April and cut its annual forecast, citing the unexpected increase in medical costs.
Andrew Witty then abruptly quit as chief executive in May for “personal reasons” and was replaced by Stephen Hemsley.
The Wall Street Journal was the first to report in January that the DOJ was investigating UnitedHealth and other large insurers over their Medicare billing practices.
The allegations included taking “extra payments after diagnosing patients with conditions that no doctor ever treated, recruited patients who use few services and, at times, obstructed access to care for the sickest patients.”
The company accused the Journal of “relying on incomplete data, a predetermined narrative and a flawed understanding of how the Medicare Advantage program works.”
The article was published about a month after UnitedHealth executive Brian Thompson was murdered in New York City by a person who was allegedly angry over the "parasitic" practices of health insurance companies.
Thompson was among several executives – including Hemsley – who was at the center of a lawsuit accusing them of making a combined $101.5 million by selling shares of the company’s stock after they became aware that the DOJ investigation.
The company did score one legal victory in a separate legal claim over its Medicare billing practices.
In March, a special master to a court case overseeing a long-running lawsuit by the government accusing UnitedHealth of overbilling Medicare by at least $2.1 billion found that the DOJ was “lacking any evidence” in its claim.
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