US Senator Chuck Grassley has launched an inquiry into UnitedHealth’s (UNH.N) Medicare billing practices, citing reports suggesting the company may have leveraged billing rules to its advantage. In a letter to CEO Andrew Witty, Grassley requested detailed information on the company’s compliance program, training manuals, and guidance documents.
Grassley described the practice of billing for multiple health conditions as “fraud”, stating that it harms not only Medicare beneficiaries but also the American taxpayer. UnitedHealth has defended its Medicare Advantage business, calling it “high performing and highly regulated”.
The Wall Street Journal reported on the issue in a series of stories, detailing how UnitedHealth profited from using Medicare billing rules to its favor. The US Justice Department is now investigating the company.
Grassley’s inquiry comes as rival Medicare Advantage insurers Humana (HUM.N) and CVS Health (CVS.N) saw their shares rise following the news. Analysts say the situation could create opportunities for long-term investors in managed healthcare stocks.
UnitedHealth has promised to provide details on its steps to review diagnoses submitted to the Centers for Medicare & Medicaid Services before March 10. The company faces margin pressure from rising medical costs, but its Medicare Advantage business is highly regulated and audited.
Source: https://www.reuters.com/business/healthcare-pharmaceuticals/sen-grassley-launches-inquiry-into-unitedhealth-groups-medicare-billing-2025-02-25