UnitedHealth’s 17% Drop Is Just the Start… Now the Feds Are Investigating Their Medicare Billings

UnitedHealth has been on a losing streak that would make even the New York Jets feel bad for them. Ever since their CEO, Brian Thompson, was murdered on December 4th (a crime that, let’s be clear, nobody in their right mind is defending) the company’s stock has been in free fall, dropping 17% like a skydiver without a parachute. But if that weren’t enough, the hits just keep coming.

First, Bill Ackman decided to throw gasoline on the fire with a now-deleted tweet suggesting that UnitedHealth’s profits were massively overstated due to their habit of denying patient care. Naturally, this sent the stock tumbling even further. Then, UnitedHealth responded the way any level-headed, rational company would… they hired a defamation law firm to go after social media posts criticizing them (insecure much?).

And now? The Justice Department has kicked down the door with a fresh investigation into UnitedHealth’s Medicare billing practices. Just when they thought things couldn’t get worse, Uncle Sam decided to take a closer look at how they’ve been racking up those extra payments.

The Justice Department’s civil fraud probe is digging into how UnitedHealth has been documenting patient diagnoses… specifically, whether they’ve been too enthusiastic about finding lucrative conditions. You see, under the Medicare Advantage system, insurers get paid more when their patients have serious diagnoses. And wouldn’t you know it? When UnitedHealth doctors start seeing patients, their charts suddenly light up with extra medical conditions like a Christmas tree.

An analysis of billions (yes, billions) of Medicare records showed that UnitedHealth-managed doctors had a mysterious habit of diagnosing patients with conditions that made the company extra money… sometimes without any evidence of treatment. (Oops.) One particular diagnosis, secondary hyperaldosteronism (which sounds completely made up) was apparently so rare that barely any other Medicare doctors outside of UnitedHealth were diagnosing it. Funny how that works.

 

The investigation is separate from a previous antitrust probe and an ongoing lawsuit alleging UnitedHealth failed to remove inaccurate diagnoses that led to bigger Medicare payouts. The DOJ is also looking into a very specific number: $8.7 billion. That’s how much extra federal money UnitedHealth pocketed in 2021 from diagnoses that never actually got treated.

Instead of, say, making things right with patients, UnitedHealth decided its biggest enemy was Twitter (sorry, X) users and rogue plastic surgeons. After Brian Thompson’s murder, online critics went hard on UnitedHealth, with some people even glorifying the alleged killer. Then, Ackman came in with his scathing (and now memory-holed) post, leading UnitedHealth to contact the SEC because, apparently, billionaires having opinions is a national security threat.

The company then hired Clare Locke, a law firm known for handling defamation cases, to start sending strongly worded letters to people who dared to criticize them online.

 

One of their first targets? Dr. Elisabeth Potter, a plastic surgeon who went viral after claiming that UnitedHealth called her mid-surgery to deny a cancer patient an overnight hospital stay. The company then allegedly threatened legal action against her for talking about it.

UnitedHealth claims it would never ask a doctor to step out of surgery to take their call, because, obviously, that would be insane. But given their track record, people aren’t exactly buying their “trust us” defense.

At this point, UnitedHealth has about as much investor confidence as a used car dealership selling flood-damaged Honda Civics. Shares fell another 7% on the DOJ news, and with the government now officially poking around in their Medicare billing, things are looking rough for the $400 billion healthcare giant.

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Stock.News does not have positions in companies mentioned.