UnitedHealth Group is under criminal investigation by the U.S. Department of Justice for potential Medicare fraud.
The government inquiry is concentrating on UnitedHealth's Medicare Advantage business methods, while it is unknown what the specifics of the possible criminal charges against the corporation are.
The investigation is the latest in a series of federal probes into the business, which also includes a civil examination into its Medicare billing methods, particularly at its physician offices, and investigations into possible antitrust crimes.
UnitedHealth is attempting to bounce back from a stock market catastrophe caused by its financial results and the abrupt appointment of chairman and former CEO Stephen Hemsley to succeed Andrew Witty as CEO this week. Over the past month, UnitedHealth's stock has dropped by about 50 percent.
The company's top insurance-arm executive was killed last year, and a technology unit hack caused months-long disruptions in payments to numerous U.S. health providers.
All of this occurs while Congress and the Trump administration seek to reduce government health spending, which is a major factor in UnitedHealth's success.
During his confirmation hearing in March, U.S. senators questioned Mehmet Oz, the current director of the Medicare and Medicaid agency, on the results of a Wall Street Journal study into the activities of Medicare Advantage insurers like UnitedHealth.
In the face of a severe lack of confidence among shareholders, regulators, and consumers, UnitedHealth may face further difficulties as a result of the criminal probe.
Kickbacks and other crimes that result in increased Medicare and Medicare payments are the target of the Justice Department's criminal healthcare fraud unit.
Although the fraud unit is run out of DOJ's headquarters in Washington, D.C., it has offices in over a dozen cities. From the fraud unit's office in New York, prosecutors are working on the criminal probe into UnitedHealth.
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Medicare Advantage insurers have an incentive to record diagnoses for patients they cover since they receive additional compensation for covering sicker patients. According to the Journal's findings, UnitedHealth's dubious diagnosis in certain instances increased taxpayer expenses by billions.