UnitedHealth announces ‘review’ of Medicare practices amid DOJ probe

UnitedHealth Group announced an internal investigation on Thursday morning into its Medicare practices, confirming a Department of Justice investigation into the same matter.

The embattled health insurer said it wants to provide "transparency and confidence in the Company’s practices," in a Form 8K filing with the Securities and Exchange Commission.

UHG "has proactively launched its own initiative to conduct third party reviews of policies, practices, and associated processes and performance metrics for risk assessment coding, managed care practices, and pharmacy services," the filing said.

UnitedHealth faces several shareholder derivative lawsuits citing media reports on the insurer’s “questionable billing tactics,” culminating with a May 14 Wall Street Journal scoop that the DOJ was preparing to initiate a criminal investigation into the insurer.

The WSJ previously reported that the DOJ is conducting a civil investigation into whether the company inflated diagnoses to receive additional payments for its Medicare Advantage plans.

UHG executives denied knowledge of the current investigation until this morning.

"The Company has now begun complying with formal criminal and civil requests from the Department," the filing stated. "The Company has full confidence in its practices and is committed to working cooperatively with the Department throughout this process."

The filing comes five days in advance of UHG's much-anticipated second-quarter earnings report.

The insurer is expected to meet Wall Street analysts Tuesday, and release a revised earnings guidance for investors. Former CEO Andrew Witty resigned May 12 and UHG abandoned the earnings guidance it issued less than four weeks earlier.

Stephen Hemsley, who led UHG from 2006 to 2017, returned to lead UHG and emphasized the discipline he is bringing back, along with "a fresh perspective."

UHG defended its Medicare practices in the Form 8K filing.

"The Company has a long record of responsible conduct and effective compliance. Independent CMS audits confirm that the Company’s practices are among the most accurate in the industry, and, following a decade-long civil challenge by the Department to aspects of our Medicare Advantage business, a court-appointed Special Master concluded there was no evidence to support claims of wrongdoing."

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.