The U.S. Department of Justice (DOJ) has opened a civil fraud investigation into UnitedHealthcare, focusing on whether the company is unlawfully inflating Medicare payments by manipulating patient diagnoses.
The federal government is examining whether UnitedHealthcare, the largest private Medicare Advantage insurer, has been increasing its monthly payments from Medicare by exaggerating the severity of patients' health conditions. According to a Wall Street Journal report, the investigation aims to determine whether this practice has led to unjustified overbilling of taxpayer-funded Medicare programs.
Medicare Advantage, created during the George W. Bush administration, was intended to cut costs by allowing private insurers to manage Medicare coverage. However, studies now suggest the program has instead increased taxpayer expenses. A 2024 report by the Medicare Payment Advisory Commission estimated that Medicare Advantage cost taxpayers $83 billion more than traditional Medicare that year alone.
UnitedHealth Group denied wrongdoing, stating, “The Wall Street Journal continues to report misinformation on the Medicare Advantage (MA) program. The government regularly reviews all [Medicare Advantage] plans to ensure compliance, and we consistently perform at the industry’s highest levels on those reviews.”
The company further responded: “We are not aware of the ‘launch’ of any ‘new’ activity as reported by the Journal. Any suggestion that our practices are fraudulent is outrageous and false.”
Medicare Advantage was designed to improve efficiency and lower costs, but reports suggest insurers use risk adjustment strategies to increase reimbursements. Critics argue this inflates taxpayer expenses while delaying patient care through prior authorization hurdles.
For UnitedHealthcare, this investigation threatens its financial stability, regulatory standing, and industry dominance. If found guilty of fraud, the company could face significant fines, forced repayment of Medicare overcharges, and stricter oversight that could impact its future operations. Beyond financial penalties, the probe could damage UnitedHealthcare’s reputation at a time when patients and policymakers are already scrutinizing private insurers' role in Medicare. Additionally, increased government oversight could lead to new regulations that reshape how insurers participate in the Medicare Advantage program, potentially cutting into UnitedHealthcare’s massive revenue stream.
The Department of Justice’s civil fraud investigation into UnitedHealthcare highlights growing concerns over Medicare Advantage billing practices. If the allegations hold, this case could prompt sweeping reforms in how private insurers manage public healthcare funds. UnitedHealthcare now faces not only potential legal repercussions but also increased scrutiny from regulators, lawmakers, and the public.
Medicare is a U.S. government health insurance program for people aged 65 and older, and some younger individuals with disabilities.
Medicare Advantage is a private insurance alternative to traditional Medicare that offers additional benefits but often requires prior authorizations for care.
Prior authorization is when insurers require approval before covering certain treatments, which can delay patient care.