DOJ investigates UnitedHealth's Medicare Advantage billing practices: report

The Department of Justice has reportedly launched an investigation into the Medicare billing practices of the UnitedHealth Group, people familiar with the matter told the Wall Street Journal, over the company’s practices for recording diagnoses.

The investigation is looking at the practices in which the company records diagnoses, triggering extra payments to its Medicare Advantage plans. An investigation by the Wall Street Journal found that patients who had been examined by UnitedHealth-employed doctors had large increases in lucrative diagnoses after joining the company’s Medicare Advantage plans.

The Medicare Advantage system gives lump-sum payments from the federal government to insurers to oversee enrollees’ Medicare benefits, and when patients receive certain diagnoses, those payments increase.

Doctors told the Wall Street Journal that UnitedHealth had trained them to document more lucrative diagnoses, even some they thought were irrelevant or obscure. UnitedHealth also reportedly used software to suggest conditions for patients and gave bonuses for considering the suggestions. UnitedHealth owns the largest US health insurance company, United Healthcare, as well as other health industry assets like doctor practices, a pharmacy benefit manager, and technology and data operations.

The Wall Street Journal also discovered that UnitedHealth had added diagnoses to patients' records, with no doctor treating these conditions. This triggered an extra $8.7 billion in federal payments in 2021. These diagnoses reportedly came from sources that included in-home visits from nurses with HouseCalls, a UnitedHealth unit. Each visit from a home nurse reportedly generated an average of $2,735 in federal payments.

At least three doctors and a nurse practitioner who had been named in the Wall Street Journal’s reporting were contacted by DOJ lawyers from the offices of the US Attorney for Minnesota, where UnitedHealth is based, and the DC-based Civil Division in January.

Three people said they were questioned about diagnoses that UnitedHealth had promoted for employees to use as well as the pressure to add diagnoses and incentive arrangements. Valerie O’Meara, who worked for UnitedHealth as a nurse practitioner in Washington state, said she was interviewed by DOJ attorneys on January 31, who were interested in the company’s software that suggested diagnoses. They were also reprotedly interested in the role of a UnitedHealth manager who she claimed had urged her to make new diagnoses beyond what doctors had treated. She said that the attorneys were more broadly looking at whether this was "abuse."

UnitedHealth has claimed that its practices help detect diseases earlier, thus saving the health system money, and that Medicare Advantage plans reduce costs and generate better health outcomes. A December 30 press release from the company said that the Wall Street Journal’s reporting "rely on often incomplete and inaccurate data to conduct flawed studies through a murky government ‘agreement."

This civil investigation is separate from a longer antitrust probe undertaken by the DOJ, which has also sued on antitrust grounds to block the company’s acquisition of the home-health company Amedisys.