DOJ investigating Medicare Advantage billing practices at UnitedHealth Group: Report

The Wall Street Journal says the U.S. Justice Department in recent months has launched an investigation into UnitedHealth Group’s billing practices to see if the company fraudulently used diagnosis data to trigger extra Medicare Advantage payments.

A series of articles in the Wall Street Journal last year alleged Medicare paid UnitedHealth billions of dollars for questionable diagnoses, an issue that’s been raised by a federal watchdog agency, as well.

Shares of the Eden Prairie-based company’s stock closed down nearly 9% Friday.

“We are not aware of the ‘launch’ of any ‘new’ activity as reported by the Journal,” UnitedHealth Group said in a statement Friday.

“We are aware, however, that the Journal has engaged in a yearlong campaign to defend a legacy [Medicare] system that rewards volume over keeping patients healthy and addressing their underlying conditions. Any suggestion that our practices are fraudulent is outrageous and false.”

Medicare Advantage is a privatized version of the federal health insurance program for seniors. Under the Medicare Advantage program, the government hires health plans to manage care for patients and pays companies more when seniors need more treatment — creating a financial incentive for insurers to document as many diagnoses as possible.

The Journal reported that Medicare Advantage insurers overall diagnosed patients with conditions that triggered extra payments of $50 billion from 2019 to 2021, even though no doctor treated the diseases.

These health plans sent their own nurses to visit patients at home and diagnose them with conditions that their doctors hadn’t, the news outlet said, triggering an average $1,818 in extra annual payments during each visit during the time period.

The volume of these additional payments to UnitedHealth Group’s massive health insurance division, UnitedHealthcare, was noted by the Wall Street Journal and the Office of Inspector General at the U.S. Department of Health and Human Services.

The Journal focused on untreated diagnoses stemming from sources, including in-home visits by nurses working for a UnitedHealth Group program called HouseCalls.

UnitedHealth Group issued a statement in response, which it described as “setting the record straight on HouseCalls, Medicare Advantage and the demonstrably superior health outcomes and cost savings delivered to more than 33 million American seniors each year.”

In December, the company again issued a statement responding to the Journal’s reporting, one of several examples showing how UnitedHealth Group has pushed back more strongly against critics after the murder of company executive Brian Thompson last Dec. 4 in New York City.

“In a series of misleading articles, the Wall Street Journal has waged a one-sided, biased attack on Medicare Advantage (MA) — a program millions of seniors rely on for health care," the company said.

“The narratives woven through the articles rely on often incomplete and inaccurate data to conduct flawed studies through a murky government ‘agreement,’ and clearly demonstrate that the Journal does not understand the Medicare Advantage program, how it is designed to function or why it differs from the traditional fee-for-service program which emphasizes volume over quality and patient outcomes.”

UnitedHealth Group faces scrutiny on a number of fronts, including a Justice Department antitrust challenge to its proposed $3.3 billion purchase of Amedisys. The company says the government’s lawsuit is wrong on the merits and threatens to deprive consumers of benefits from sharper competition in the hospice and home care market.

The company owns UnitedHealthcare, the nation’s largest health insurer. It also runs a health services business called Optum that’s been caught up in controversies involving pharmacy benefit managers and its failure to prevent a massive data breach last year.

The new civil investigation apparently is separate from a longer-running Justice Department antitrust probe that was first reported last February, the Wall Street Journal said.

The news outlet reported Friday that a Justice Department spokesman declined to comment, as did a spokeswoman for the Department of Health and Human Services’ Office of Inspector General, which the Wall Street Journal said is also involved in the civil fraud probe.

UnitedHealth Group has developed over the past 15 years a large network of affiliated and employed physicians within Optum.

The Wall Street Journal in December reported its analysis of Medicare records showed patients examined by the company’s doctors had huge increases in lucrative diagnoses after joining the company’s Medicare Advantage plans. Physicians told the Journal they’d been trained by the company to document revenue-generating diagnoses, including some they felt were obscure or irrelevant, and pushed to use software that suggests conditions.

In response to the article, UnitedHealth Group defended its work with Optum-affiliated doctors.

“[Medical Advantage] members that are served by an Optum provider benefit from innovative clinical models and a value-based care approach that leads to more accurate diagnoses, greater availability of care and better health outcomes and prevention including less hospitalization, more cancer screenings and better chronic disease management,” the company said.

The Wall Street Journal said its analysis used data that UnitedHealth and other Medicare Advantage insurers submitted to the federal government. Data was accessed, the news outlet said, under a standard research agreement with the agency overseeing Medicare.

On Friday, UnitedHealth Group said the Wall Street Journal “continues to report misinformation” on Medicare Advantage.

”The government regularly reviews all MA plans to ensure compliance and we consistently perform at the industry’s highest levels on those reviews,” the company said.

In February 2022, the Justice Department tried to block UnitedHealth Group’s acquisition of Change Healthcare, alleging that the merger would harm competition by giving UnitedHealth Group access to rival health insurers’ competitively sensitive information.

But a federal judge found that the government failed to show during a two-week trial that the acquisition would substantially diminish competition. The judge ruled that UnitedHealth Group’s incentives “are not nearly as one-sided as the government suggests.”

UnitedHealth Group’s more aggressive approach, particularly with critics on social media, has been evident in the weeks leading up to a court hearing Friday for the man accused of killing Thompson. This month, the company has pushed back strongly in a billing dispute with a Texas surgeon whose cause has been championed by activist investor Bill Ackman.