UnitedHealth Group confirmed on Thursday (July 24th) that the group is under investigation by the US Department of Justice for its handling of the federal Medicare program and stated that it will cooperate with the department’s work.
In a document submitted to the US Securities and Exchange Commission (SEC), UnitedHealth Group stated that it has begun to cooperate with the formal criminal and civil investigation requests from the Department of Justice and proactively reached out to the department after media reports about the investigation emerged. The group also mentioned that it has initiated a third-party review of its business policies and performance indicators.
The company has been in turmoil since last December when Brian Thompson, the CEO of its subsidiary UnitedHealthcare, was shot dead on the streets of Manhattan, New York. This incident not only disrupted the company but also sent shockwaves through the entire health insurance industry, with the public expressing dissatisfaction accumulated over the years towards health insurance companies.
UnitedHealth Group stated in the document submitted to the SEC on Thursday that it is “confident in its actions and committed to cooperating with the Department of Justice throughout the process.”
The Wall Street Journal reported in May that the Department of Justice is investigating potential criminal fraud by UnitedHealth Group in its Medicare Advantage program. The company is one of the major insurance companies contracted with the federal government to provide medical insurance services to the elderly and other beneficiaries. In response to the report, the company reiterated its belief in the integrity of its Medicare Advantage program.
In the document submitted on Thursday, UnitedHealth Group also mentioned that the company has “maintained a long-standing record of responsible behavior and effective compliance.”
This investigation marks the latest crisis faced by this top US health insurance company, which is also one of the largest companies in the United States.
As the largest provider of Medicare Advantage plans in the United States, the business of UnitedHealthcare, a subsidiary of the group, covers over 8 million people. However, due to increasing healthcare service utilization and rate cuts, this business has been under pressure in recent quarters.
Since Thompson’s murder in December last year, the company’s stock price has mostly been on a downward trend. Over the past year, its stock price has dropped by about half, resulting in a market value loss of over $277 billion. Later in the Thursday morning trading session, the stock fell by approximately 3.6%.