DOJ opens criminal investigation into UnitedHealth Group for alleged Medicare fraud

The Wall Street Journal revealed Wednesday that the U.S. Department of Justice (DOJ) is iformally investigating UnitedHealth Group for possible criminal fraud related to Medicare. According to people familiar with the matter, the agency's health care fraud unit is reportedly overseeing the investigation. The media outlet added that, although the exact nature of the criminal charges against the health insurer is unclear, several sources told the Journal that the investigation is focused on UnitedHealth's business practices within the Medicare Advantage program.

According to different media outlets, Medicare Advantage insurers are paid more to care for patients with serious illnesses, a fact that would have created an incentive to document even questionable diagnoses. On this issue, the Journalrevealed that questionable diagnoses made by UnitedHealth increased spending for U.S. taxpayersby billions of dollars. On these findings, lthe company publicly rejected what was published by the newspaper, claiming that its analysis was "inaccurate and biased," and even defended that Medicare Advantage "offers better health outcomes and more affordable health care for millions of seniors" compared to traditional Medicare.

Critical timing for the company

The DOJ-led investigation comes on top of numerous government inquiries currently underway into UnitedHealth, including an investigation into its Medicare billing practices, and several others for possible antitrust violations. The Journaldetailed that the current criminal investigation represents an additional delicate challenge for the company, amid a serious loss of confidence, not only from customers, but also from regulators and even company shareholders.

Currently, UnitedHealth is looking to recover from the stock market collapse that triggered its financial performance, as well as the sudden dismissal this week of its CEO Andrew Witty, who was replaced by former CEO and chairman of the board Stephen Hemsley. The whole situation comes a year after the chief executive of the insurance arm was murdered, and the company suffered a massive computer attack on one of its technology units, which disrupted payments to many, many healthcare providers in the country for a couple of months.