UnitedHealth Faces Criminal Probe Over Medicare Practices
The United States Department of Justice (DOJ) has launched a criminal investigation into UnitedHealth Group, focusing on potential fraudulent activities related to its Medicare Advantage program. This news was reported on Wednesday by the Wall Street Journal.
Despite these allegations, UnitedHealth asserts that it has not been informed by federal prosecutors regarding any such criminal probe. A company spokesperson emphasized confidence in the integrity of their Medicare Advantage program. Nevertheless, following the report, UnitedHealth’s stock tumbled by 8% in after-hours trading.
Recent Challenges and Leadership Changes
The health insurance giant has been experiencing significant challenges lately. The unexpected resignation of CEO Andrew Witty on Tuesday, paired with the suspension of its financial outlook for 2025 due to increasing medical expenses, has contributed to the company’s current tumultuous period. Consequently, UnitedHealth’s share prices have plummeted by nearly 18%, reaching a four-year low.
Following these developments, Stephen Hemsley, who previously led the company for over a decade until 2017, has returned to steer the company through this crisis. This follows a series of setbacks, including the high-profile murder of Brian Thompson, the CEO of UnitedHealth’s insurance division, last December.
DOJ Scrutiny and Broader Investigations
The criminal investigation, managed by the DOJ’s healthcare-fraud unit, examines the business practices of UnitedHealth’s Medicare Advantage program. Sources familiar with the situation have indicated that this investigation commenced at least as early as last summer. However, the specifics of the investigation are not entirely clear.
A DOJ spokesperson refrained from commenting on the ongoing investigation. Similarly, the department has not yet responded to requests for comments from Reuters.
Previously, in February, the Wall Street Journal reported a civil fraud investigation concerning UnitedHealth’s Medicare practices. At that time, the company indicated that they were unaware of any new investigatory actions. Additionally, U.S. Senator Chuck Grassley initiated an inquiry into UnitedHealth’s Medicare billing practices earlier this year, seeking extensive compliance documentation.
| Event | Date | Impact |
|---|---|---|
| DOJ Criminal Probe Reported | May 14, 2025 | Stock price fell by 8% |
| CEO Andrew Witty Resigned | May 13, 2025 | Shares plunged nearly 18% |
| Civil Fraud Investigation Reported | February 2025 | Unclear impact at the time |
UnitedHealth’s difficulties are unfolding amid a broader scrutiny of the Medicare Advantage sector. Earlier this month, the DOJ accused three major U.S. health insurers of providing substantial kickbacks to brokers to promote enrollment in their Medicare Advantage plans.
The Medicare Advantage program, serving nearly half of the 65 million people on Medicare in the U.S., allows private insurers to manage benefits. These companies receive a fixed payment for each enrollee, with potential increases for patients with multiple health conditions, differentiating it from standard Medicare which is government-administered.
As UnitedHealth continues to navigate these legal and operational challenges, the company’s share values have already fallen by approximately 40% this year, reflecting the ongoing concerns surrounding its future stability and credibility.
