UnitedHealth Group the largest health insurer in the U.S. is facing significant hurdles as its stock price drops sharply. This comes after reports surfaced about a potential investigation by the U.S. Department of Justice (DOJ) into the company's Medicare billing practices a claim UnitedHealth strongly denies. Here’s a breakdown of the situation

What’s Behind the Alleged DOJ Investigation?

Shares of UnitedHealth Group saw a major dip after a report by the Wall Street Journal revealed that the company may be under investigation by the DOJ concerning its Medicare billing practices. The investigation reportedly focuses on possible civil fraud not criminal conduct.

At the core of the investigation are concerns that UnitedHealth may have been submitting inflated diagnoses for patients, potentially increasing the payments they receive for Medicare Advantage plans. Under this system, insurers like UnitedHealth receive lump-sum payments from the federal government based on the health conditions of the patients they cover. The more severe the diagnosis the higher the payment, leading to greater profits for insurers.

In December the Wall Street Journal ran an exposé suggesting that UnitedHealth had been systematically increasing diagnoses for conditions that led to more lucrative payments. The report cited doctors who claimed that UnitedHealth had incentivized them to document specific revenue-generating diagnoses even those that appeared unnecessary or irrelevant. The company allegedly used software to suggest such diagnoses and offered bonuses for physicians who followed through with the suggestions.

The DOJ’s investigation could be focused on whether UnitedHealth inflated these diagnoses to boost their payments from the government.

UnitedHealth Responds to Allegations

A spokesperson for UnitedHealth Group denied any wrongdoing, asserting that the company has always adhered to the highest standards in Medicare Advantage operations. The company also challenged the Wall Street Journal’s coverage describing it as misleading and part of an ongoing campaign against Medicare Advantage. They emphasized that the government regularly reviews the plans and that UnitedHealth performs well during these reviews. The spokesperson strongly rejected any claims of fraudulent practices.

Further Issues for UnitedHealth

The DOJ investigation isn’t the first issue to impact UnitedHealth recently. In December, the CEO of UnitedHealth’s UnitedHealthcare division, Brian Thompson, was tragically killed in a shooting incident as he was arriving at an investor conference. While such events typically draw public sympathy the incident instead led to negative reactions on social media, largely due to frustrations over the U.S. healthcare system which many critics feel is unaffordable and unjust.

Public sentiment against UnitedHealth intensified further after CEO Andrew Witty published an op ed in the New York Times that was widely criticized. The piece led to an outpouring of complaints about the difficulties people face when trying to obtain necessary medical care and dealing with insurers like UnitedHealth.

Stock Price Decline

As a result of these events, UnitedHealth’s stock price has taken a significant hit. Prior to the incidents in December the company’s stock was trading at over $600 per share. By mid-December it had fallen to under $500 and following the DOJ probe reports the stock dropped further. As of now shares are trading below $460 each marking a 9% decrease since the beginning of 2025. Over the past 12 months the stock has dropped by more than 12%.