UnitedHealth Group (UNH) Faces Investor Scrutiny After Wall Street Journal Report of Justice Department Probe Into Medicare Billing Practices – Hagens Berman

Core Viewpoint - UnitedHealth Group's stock price dropped significantly following reports of a DOJ investigation into its Medicare billing practices, raising concerns about potential fraud and improper revenue recognition [1][3]. Group 1: Investigation and Allegations - The DOJ has initiated a civil fraud investigation into UnitedHealth's practices related to recording diagnoses that lead to additional payments for Medicare Advantage plans [1][2]. - Allegations include that UnitedHealth trained doctors to document revenue-generating diagnoses, some of which were deemed obscure or irrelevant, and used software to suggest conditions for billing purposes [3][4]. - The investigation is focused on whether UnitedHealth improperly billed the federal government for services to Medicare Advantage enrollees, potentially leading to illegal revenue recognition in financial statements [2][5]. Group 2: Market Reaction and Financial Impact - Following the news of the investigation, UnitedHealth's share price fell by $36, a decrease of 7$33 billion in shareholder value in one day [1][3]. - The investigation and its implications have raised concerns about the legality of UnitedHealth's Medicare Advantage practices and the accuracy of its reported revenues [5][6]. Group 3: Regulatory Scrutiny - Senator Chuck Grassley has demanded that UnitedHealth review all diagnoses submitted to the Centers for Medicare & Medicaid Services (CMS) and identify any that are obscure, irrelevant, or inaccurate [4]. - The HHS Office of Inspector General previously reported that UnitedHealth received more payments from CMS for diagnoses made during in-home health risk assessments than any other Medicare Advantage Organization, raising concerns about the accuracy of these diagnoses [6].