UPDATED: 1:30 p.m. on Feb. 25
Less than a week after reports surfaced that the Justice Department was investigating UnitedHealth Group for billing practices in Medicare Advantage, a key senator is also putting pressure on the company.
The Wall Street Journal reported Tuesday that Sen. Chuck Grassley, R-Iowa, sent a letter to UnitedHealth CEO Andrew Witty pushing for a detailed look at how the company handles billing in Medicare Advantage. Grassley argued in the letter that "the apparent fraud, waste, and abuse at issue is simply unacceptable and harms not only Medicare beneficiaries, but also the American taxpayer," according to WSJ.
The newspaper has conducted a series of articles that allege UnitedHealth is lining its pockets through upcoding, where a patient is given additional diagnoses to secure higher payouts.
UnitedHealth has consistently hit back at the WSJ's series, arguing that the allegations are false. In a statement Tuesday to the outlet, the company said, "We welcome the opportunity to share the facts with Senator Grassley, especially given the ongoing misinformation campaign."
The company's stock dropped significantly in the late morning when reports first surfaced, though was beginning to rebound in the early afternoon. Some Wall Street analysts have expressed skepticism that the DOJ probe would produce significant results, given that the alleged practices in question are not likely unique to UnitedHealth.
Analysts at KeyBanc Capital Markets, for example, noted that UnitedHealth previously triumphed in a whistleblower suit over risk adjustment that had backing from DOJ.
"We are skeptical that this purported investigation will result in a material fine and/or change in business practice that justifies today’s stock decline," they wrote.
UHG's stocks declined by about 7% following news of the DOJ probe. The KeyBanc analysts said investors were likely concerned about policy overhauls that could impact risk adjustment across the industry, though steps in this area have not materialized to date.
UPDATED: Noon on Feb. 21
The Department of Justice is probing UnitedHealth Group's billing practices in Medicare Advantage, according to a report from the Wall Street Journal.
The newspaper reported, citing sources close to the matter, that DOJ attorneys are investigating whether the healthcare giant is engaged in a practice called upcoding, where additional diagnoses are recorded to juice payouts. WSJ has released a series of articles that allege UnitedHealth pocketed billions through this practice.
Investigators with the Justice Department spoke with providers who were interviewed for those articles as recently as Jan. 31, according to the report.
The Journal also reported a year ago that the DOJ was investigating UHG on antitrust grounds, though details on that investigation have been limited.
In a statement Friday morning, UnitedHealth Group said that the newspaper "continues to report misinformation on the Medicare Advantage program."
"We are not aware of the 'launch' of any 'new' activity as reported by the Journal," the company said. "We are aware, however, that the Journal has engaged in a year-long campaign to defend a legacy system that rewards volume over keeping patients healthy and addressing their underlying conditions."
The WSJ story said that at least two providers who were interviewed provided the DOJ with documentation while one person contacted by the outlet said the Department of Health and Human Services Office of Inspector General was also involved.
OIG has also probed overbilling in Medicare Advantage, including a report from October that found MA plans likely earned billions from home health visits that could have been inflated due to upcoding.
UnitedHealth Group has defended itself against the Wall Street Journal's reporting, saying in a Dec. 30 press release that the articles "rely on often incomplete and inaccurate data to conduct flawed studies" and "clearly demonstrate that the Journal does not understand the Medicare Advantage program."
"In a series of misleading articles, the Wall Street Journal has waged a one-sided, biased attack on Medicare Advantage—a program millions of seniors rely on for health care," the company said.
Shares in UnitedHealth trended down premarket on Friday following the WSJ report.