The Justice Department is investigating United Healthcare's Medicare billing practices, the Wall Street Journal reports. The new civil fraud investigation is examining the company’s practices for recording diagnoses that trigger extra payments to its Medicare Advantage plans, including at physician groups the insurance giant owns. The Journal reported earlier that Medicare paid UnitedHealth billions of dollars for questionable diagnoses. In the Medicare Advantage system, insurers get lump-sum federal payments to oversee enrollees’ Medicare benefits. When patients have certain diagnoses, the payments go up, creating an incentive to diagnose more diseases. The Medicare billing investigation adds to the scrutiny on UnitedHealth, a $400 billion company that owns the largest U.S. health insurer and a network of other health-industry assets including its doctor practices, a large pharmacy-benefit manager and data and technology operations.
The civil investigation is separate from a longer-running Justice Department antitrust probe. An analysis of billions of Medicare records showed that patients examined by UnitedHealth-employed doctors had huge increases in lucrative diagnoses after joining the company’s Medicare Advantage plans. Doctors said UnitedHealth, based in the Minneapolis area, trained them to document revenue-generating diagnoses, including some they felt were obscure or irrelevant. The company used software to suggest conditions and paid bonuses for considering the suggestions, among other tactics, the doctors said.