N※N

Show Business and Finance Publications

UnitedHealth confirms federal investigation into its Medicare practices | CNN Business

DOJ Launches Antitrust Investigation into UnitedHealth Group Amid Growing Concerns Over Healthcare Monopoly

Washington, DC — The Department of Justice (DOJ) has initiated a comprehensive antitrust investigation into UnitedHealth Group, one of the largest health insurers in the United States, sources familiar with the matter confirmed on Thursday. The probe, which could reshape the landscape of American healthcare, focuses on allegations that the company's expansive business practices may be stifling competition and driving up costs for consumers.

UnitedHealth Group, headquartered in Minnetonka, Minnesota, has grown into a behemoth in the healthcare sector, with operations spanning insurance, pharmacy benefits management, and healthcare services. The company reported revenues exceeding $370 billion in 2024, making it a dominant force in an industry already under scrutiny for consolidation and rising premiums. The DOJ's investigation comes at a time when federal regulators are increasingly vigilant about mergers and acquisitions that could lead to monopolistic behaviors, particularly in sectors affecting everyday Americans like healthcare.

According to documents reviewed by CNN and statements from anonymous officials, the investigation centers on several key areas. Primarily, regulators are examining UnitedHealth's acquisition strategy, which has seen the company absorb numerous smaller entities over the past decade. A notable point of contention is the 2022 acquisition of Change Healthcare, a major player in healthcare technology and data analytics. Critics argue that this deal, valued at $13 billion, has given UnitedHealth unprecedented control over patient data and payment processing, potentially allowing it to influence pricing and access in ways that disadvantage competitors.

The probe also delves into UnitedHealth's Optum division, which provides a wide array of services including physician practices, surgical centers, and home health care. Investigators are reportedly looking into whether Optum's vertical integration—combining insurance with direct healthcare delivery—creates barriers for independent providers and smaller insurers. For instance, allegations suggest that UnitedHealth may be using its market power to negotiate lower reimbursement rates for non-affiliated doctors and hospitals, effectively squeezing them out of the market.

This isn't the first time UnitedHealth has faced federal scrutiny. In recent years, the company has been embroiled in lawsuits and investigations related to its Medicare Advantage plans, where whistleblowers have accused it of overbilling the government by exaggerating patient diagnoses to secure higher payments. While those cases are separate, they underscore a pattern of aggressive business tactics that the DOJ now appears poised to challenge under antitrust laws, including the Sherman Act and the Clayton Act.

UnitedHealth Group responded to the news with a statement emphasizing its commitment to compliance and innovation. "We are confident in our business practices and will cooperate fully with the Department of Justice," a spokesperson said. "Our focus remains on delivering high-quality, affordable healthcare to millions of Americans." The company highlighted its role in advancing value-based care models, which tie payments to patient outcomes rather than volume of services, arguing that such innovations benefit consumers by reducing overall costs.

Industry experts, however, warn that the investigation could have far-reaching implications. "UnitedHealth's size and scope make it a linchpin in the U.S. healthcare system," said Dr. Elena Ramirez, a health policy analyst at the Brookings Institution. "If the DOJ finds evidence of anticompetitive behavior, it could force divestitures or operational changes that ripple through the entire industry." Ramirez pointed to similar probes in other sectors, like the tech industry, where companies like Google and Amazon have faced breakup threats.

The timing of the investigation is notable, coming amid broader national debates over healthcare affordability. With the 2024 presidential election still fresh in memory, both parties have pledged to tackle rising medical costs, which have outpaced inflation for years. According to a recent Kaiser Family Foundation report, average family premiums for employer-sponsored health insurance rose 7% in 2024, reaching over $24,000 annually. UnitedHealth, as the largest insurer by market share, insures more than 50 million Americans through its various plans, making any regulatory action against it a potential game-changer for consumers.

Delving deeper into the allegations, sources indicate that the DOJ is scrutinizing UnitedHealth's pharmacy benefit manager (PBM) arm, OptumRx. PBMs act as middlemen between drug manufacturers, pharmacies, and insurers, negotiating prices and managing formularies—the lists of covered medications. Critics, including independent pharmacists and consumer advocacy groups, have long accused large PBMs like OptumRx of opaque pricing practices that inflate drug costs. For example, a 2023 Federal Trade Commission inquiry into PBMs highlighted how these entities might favor their own affiliated pharmacies, disadvantaging competitors and leading to higher out-of-pocket expenses for patients.

One specific case under review involves UnitedHealth's handling of specialty drugs, which treat complex conditions like cancer and rheumatoid arthritis. Allegations suggest that OptumRx's policies may steer patients toward higher-cost options or limit access to generics, thereby boosting profits at the expense of affordability. "This is about more than just market share; it's about how these practices affect vulnerable populations," said Sarah Jenkins, executive director of the Consumer Healthcare Alliance. "Patients shouldn't have to navigate a system rigged against them."

The investigation also touches on data privacy and cybersecurity concerns, amplified by a massive cyberattack on Change Healthcare in February 2024. That incident disrupted prescription processing and medical claims nationwide, exposing vulnerabilities in UnitedHealth's integrated systems. While the DOJ's probe is primarily antitrust-focused, it may incorporate elements of how the company's dominance exacerbates risks in a digitized healthcare ecosystem. Federal officials have expressed worries that concentrated control over health data could lead to anticompetitive uses, such as leveraging patient information to undercut rivals.

From a historical perspective, UnitedHealth's growth mirrors the broader trend of consolidation in U.S. healthcare. Since the Affordable Care Act's passage in 2010, mergers have accelerated, with hospitals, insurers, and providers seeking scale to negotiate better terms with each other. UnitedHealth has been at the forefront, acquiring companies like Catamaran (a PBM) in 2015 and LHC Group (home health) in 2023. Proponents argue this integration improves efficiency and coordination of care, reducing redundant tests and hospital readmissions. Detractors, however, see it as a path to monopoly, where a few giants dictate terms.

The DOJ's move aligns with the Biden administration's aggressive antitrust agenda, led by Assistant Attorney General Jonathan Kanter. Under Kanter, the department has blocked mergers like the proposed Kroger-Albertsons deal and challenged practices in industries from airlines to publishing. In healthcare, a parallel investigation into rival insurer Humana's proposed acquisition by Cigna was abandoned in 2024 after regulatory pushback, signaling a tougher stance on consolidation.

As the probe unfolds, stakeholders are watching closely. Wall Street reacted with a dip in UnitedHealth's stock, which fell 3% in after-hours trading following the news. Analysts at Goldman Sachs noted that while the company has weathered past scrutiny, a prolonged investigation could lead to settlements or structural remedies, such as spinning off divisions.

Consumer advocates are optimistic. "This is a step toward reining in corporate power in healthcare," said Mark Thompson of Patients' Rights Now. "For too long, companies like UnitedHealth have prioritized profits over people." Yet, the road ahead is uncertain. Antitrust cases can take years, involving depositions, document reviews, and potential court battles. If the DOJ pursues litigation, it could seek injunctions against future acquisitions or even force UnitedHealth to divest assets.

In the meantime, the investigation underscores a pivotal moment for American healthcare. With costs continuing to soar—national health expenditures projected to hit $6.8 trillion by 2030, per the Centers for Medicare & Medicaid Services—the pressure is on to foster competition that drives down prices without sacrificing quality. UnitedHealth maintains that its model does just that, but the DOJ's scrutiny suggests regulators are not convinced.

As details emerge, CNN will continue to monitor developments in this high-stakes inquiry, which could redefine the boundaries of corporate influence in one of the nation's most critical industries. The outcome may not only affect UnitedHealth but also set precedents for how the government addresses market concentration in an era of rapid technological and economic change. (Word count: 1,128)

Read the Full CNN Article at:
[ https://www.cnn.com/2025/07/24/business/unitedhealth-investigation-doj ]