Federal audit seeks $47M refund from UnitedHealthcare

Federal auditors are calling on UnitedHealthcare to repay $47 million to the federal government after an investigation concluded the company’s Medicare Advantage health plans received significant overpayments.

The Eden Prairie-based health insurer rejected the auditors’ findings, which echo long-disputed allegations that insurers have gamed the system by inflating so-called risk-adjustment payments from Medicare.

Investigators found most medical records reviewed in the audit failed to justify the extra payments that UnitedHealthcare requested for covering seniors with more complicated medical histories, according to the report released this week by the Office of Inspector General (OIG) at the U.S. Department of Health and Human Services.

For years the OIG has published reports suggesting Medicare Advantage, the privatized version of traditional Medicare, has given insurers billions in extra payments based on questionable diagnosis data. Health insurers have vehemently denied that claim.

On Tuesday, OIG released its UnitedHealthcare report requesting $47 million in repayments, plus a separate audit calling on Humana, another large Medicare Advantage insurer based in Kentucky, to refund $131 million.

Since 2019, the OIG has published about four dozen of these company-specific compliance audits, plus two reports that raised questions about practices used across the health insurance industry.

UnitedHealthcare said the latest audit’s methodology was “flawed” and provided further evidence that the OIG and the federal agency that runs Medicare should improve the auditing process.

Rather than auditing every type of medical claim and code, investigators focused on diagnoses they believed were more likely to show discrepancies. This skewed the sample, UnitedHealthcare argued, and meant the results don’t reflect overall accuracy.

“The audit structure is one-sided because it looks for potential overpayments but does not evaluate potential underpayments,” the company said in a statement.

Audit recommendations are not final determinations, the OIG said. The federal agency that runs Medicare will determine if overpayments exist and whether to recoup funds.

UnitedHealthcare is the nation’s largest health insurer.

Its parent company, UnitedHealth Group, is Minnesota’s largest company, with operations that include everything from medical clinics to a large division for managing pharmacy benefits. UnitedHealthcare has long been the nation’s largest insurer in Medicare Advantage, which compensates insurers for taking on members more likely to use health care services.

The goal of this risk-adjustment process is to eliminate incentives for insurers to cherry-pick the healthy patients. But it creates an incentive to inflate some patients’ medical conditions on paper.

An independent group that advises Congress, the Medicare Payment Advisory Commission, has warned about problems with risk-adjustment overpayments since Medicare Advantage launched about 20 years ago.

This commentary and other related critiques culminated nearly two years ago with an Office of Inspector General report saying UnitedHealth Group led its peers in using “questionable” practices to win billions of dollars of add-on risk-adjustment funding.

Although the topic is well studied, this week’s report from the OIG represents the first compliance audit to look at a UnitedHealth Group subsidiary among the reports issued since 2019. It looked at the company’s UnitedHealthcare of Wisconsin Inc. division, which provided coverage to seniors in several states.

Auditors focused on a sample of 250 cases where the UnitedHealthcare subsidiary obtained risk-adjustment payments in 2020 and 2021. The company provided medical records to justify selected diagnosis codes for 247 of these cases. Yet in 183 instances, the OIG found, the codes weren’t supported by the records.

Within the sample, these “noncompliant” codes resulted in $722,280 worth of overpayments, the OIG said. The auditors then estimated for the entire contract at least $46.9 million in unjustified risk-adjustment payments in that time frame.

“As demonstrated by the errors found in our sample, United’s policies and procedures to prevent, detect and correct noncompliance with [Medicare’s] program requirements could be improved,” auditors wrote.

In response, UnitedHealthcare did not volunteer to repay Medicare $47 million.

Instead, UnitedHealthcare executive Robert Hunter said the OIG should “withdraw” its report. “These were not diagnoses made up by United,” he wrote in response to the audit.

Humana also challenged OIG’s findings released this week. Company executive Susan Crowe asked the agency to “reconsider its recommendations,” arguing Humana had repeatedly explained its risk-adjustment practices to the federal Centers for Medicare and Medicaid Services (CMS).

In 2023, Humana filed a lawsuit arguing the federal government’s own audits had overstated problems with risk adjustment.

The litigation continued in 2024 and 2025 as UnitedHealthcare was defending itself from media investigations and academic reports alleging aggressive and questionable diagnostic coding for risk-adjustment payments.

UnitedHealth Group disclosed in June 2025 that its Medicare business was being investigated by the U.S. Department of Justice. The company continues to defend itself against a long-running whistleblower lawsuit over risk-adjustment practices.

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