U.S. Justice Department Investigates UnitedHealth Over Medicare Billings

UnitedHealth Group (UNH), the largest U.S. health insurer, is being investigated by the U.S. Justice Department over its Medicare billing practices. A report in The Wall Street Journal newspaper says that the Justice Department has opened a civil fraud investigation into UnitedHealth’s billings of the Medicare system. News of the investigation sent UnitedHealth’s stock down 10% in premarket trading.The investigation aims to examine the health insurer’s practices for documenting diagnoses that trigger extra payments to the company’s Medicare Advantage plans.Under the current system, the federal government pays insurers a fixed amount each month to oversee enrollees’ Medicare benefits. Those payments can increase when patients are diagnosed with certain diseases and ailments. News of the investigation comes after the Justice Department moved to block UnitedHealth’s $3.3 billion U.S. acquisition of home healthcare provider Amedisys on antitrust concerns. The Justice Department argued that the proposed deal would eliminate competition in America’s hospice industry.It’s not clear how long the investigation into the Medicare billings will last, but it has cast a cloud over UnitedHealth and its stock.Prior to today (Feb. 21), UnitedHealth Group’s stock had declined 4% over the last 12 months to trade at $502.42 U.S. per share.