The American healthcare industry has been under intense scrutiny in recent months, for fears over how private insurers administer federal Medicare money. In early 2025, some of the biggest health insurers were accused of paying bribes to brokers to send patients into their Medicare Advantage plans.
The purported abuse of government programs has prompted investigations and lawsuits that are starting to focus on business practices within the $450 billion Medicare Advantage industry. Now attention has shifted to UnitedHealth Group, one of the country's largest health care businesses.
Now, UnitedHealth is facing a criminal investigation by the U.S. Department of Justice (DOJ) for its Medicare Advantage billing practices. Washington, DataWashington, and DataSources briefed on the question said it was being handled by the healthcare fraud unit of the DOJ, which has been investigating since at least the summer of 2024.
The inquiry focuses on whether the company employed improper tactics to exaggerate patient diagnoses and boost its payouts from the federal government. This news follows a report a few weeks ago indicating that civil fraud investigations involving UnitedHealth's billing practices and U.S. lawmakers' investigations into compliance practices, were also ongoing.
Although the inquiry was quite serious, UnitedHealth maintains that it has not yet been informed about any ongoing investigation by the DOJ. The company has defended the integrity of its Medicare Advantage business; it says it complies with all regulatory guidance. But the news carried an immediate financial sting.
If losses continue, the company's market capitalization could fall to $280 billion—nearly half of the $530 billion it was valued at in mid-April. UnitedHealth's stock has now declined by nearly 40% year-to-date, reaching a four-year low.
The legal scrutiny comes amid significant leadership tumult at the company. CEO Andrew Witty unexpectedly announced his retirement on Tuesday. In the same announcement, the firm announced it was withdrawing its 2025 financial guidance due to "increasing health care costs.
As part of an effort to stabilize the company, UnitedHealth also brought back Shelley's old CEO, Stephen Hemsley. Hemsley, who held the position at the company from 2006 to 2017, is returning to the role at a time when the company faces increasing scrutiny from regulators and shareholders.
UnitedHealth has also been hit by a series of unrelated but highly disruptive events. Its insurance unit's chief executive, Brian Thompson, was killed in December 2024. That incident thrust the company into the headlines and contributed to an already turbulent climate. And the organization has grappled with increased medical costs and a significant cyberattack, both factors that have contributed to instability on the operating side.
Government oversight of the Medicare Advantage program has been on the rise. The DOJ last month brought charges against several big health insurers for paying enormous kickbacks to brokers who could get them patients. Nearly half of all Medicare beneficiaries in the U.S. are now covered by a Medicare Advantage plan. These private plans are paid a set amount by the government and can make more money if they correctly diagnose patients with multiple conditions — adding a financial incentive to precise coding.
