United Health Faces Criminal Investigation Over Alleged Medicare Fraud

One of the largest healthcare organisations in the United States, United Health Group, is now the subject of a criminal investigation by the US Department of Justice. The investigation, overseen by the justice department’s healthcare division, reportedly focuses on the company’s Medicare Advantage business practices. While the exact accusations remain unclear, the inquiry has been active since at least last summer, according to reports published by The Wall Street Journal.

This latest development comes mere days after the abrupt resignation of United Health’s British chief executive, Sir Andrew Witty, who cited “personal reasons” for stepping down. There is no evidence linking his sudden departure with the ongoing investigation, but the timing has raised questions. Sir Andrew, who was formerly CEO of GSK, took charge of United Health in 2021 and faced significant challenges during his tenure. These included a cybersecurity attack, increasing criticism of healthcare costs in the US, and a steep decline in the company’s share price.

The company’s shares plummeted 7.5 per cent in pre-market trading following the news of the investigation, marking a five-year low for the healthcare giant. By Thursday afternoon, the shares were trading at 14.5 per cent below the opening price. The financial turbulence did not end there, as United Health also suspended its 2025 financial forecast, attributing this decision to rising healthcare demands and higher associated costs.

Stephen Hemsley, who previously served as the company’s long-term CEO and chairman, has stepped in to replace Witty. Hemsley is widely credited with transforming United Health into a major player in the diversified healthcare sector. A statement from United Health expressed gratitude for Witty’s leadership, noting his stewardship during what it described as some of the most difficult times in the company’s history. Witty will continue to act as a senior adviser to Hemsley.

United Health owns America’s largest health insurer, United Healthcare, which provides coverage to approximately 49 million individuals. The company is also involved in pharmacy benefit management, healthcare software solutions, and medical practices. Medicare Advantage, the focus of the ongoing investigation, is a programme within the broader taxpayer-funded Medicare system, administered by private insurers under government approval.

Although previous company filings noted that United Health was subject to various government investigations, audits, and reviews, this ongoing inquiry carries significant weight. It adds to the mounting criticism of the American healthcare system, including grievances targeting middlemen in pharmaceutical benefit management. This comes amid a renewed push by policymakers to reduce healthcare costs in the US, which has consistently faced widespread public concern over the affordability and accessibility of medical care.