UnitedHealth Group is once again under the microscope after a Senate Judiciary Committee investigation concluded that the company used aggressive internal practices to boost federal payments tied to its Medicare Advantage plans.
The report follows a months long probe launched by Sen. Chuck Grassley, Republican of Iowa, after a 2024 Wall Street Journal investigation raised concerns about how UnitedHealth collected and recorded patient diagnoses that increased government reimbursements.
Medicare Advantage allows private insurers to manage healthcare for seniors and disabled Americans in exchange for fixed monthly payments from the federal government. Those payments rise when patients are diagnosed with certain serious or chronic conditions through a process known as risk adjustment. The goal is to ensure insurers receive enough funding to cover higher cost patients.
But the Senate report argues that UnitedHealth went far beyond the intent of the program.
Based on a review of more than 50,000 pages of internal company records, investigators said UnitedHealth had effectively turned diagnosis coding into a revenue strategy. The report states the company had “turned risk adjustment into a business, which was not the original intent.”
Investigation Triggered by Wall Street Journal Reporting
Grassley formally requested documents from UnitedHealth in February of last year after the Journal reported that the insurer routinely added diagnoses to patient records that triggered higher Medicare payments. In many cases, the Journal found that patients were never treated for the added conditions.
Some diagnoses were later questioned as inaccurate or unsupported by clinical evidence. The Journal estimated the practices may have generated billions of dollars in additional federal payments over several years.
UnitedHealth has denied wrongdoing and says its coding practices comply with Medicare rules. A company spokesman said the firm disagrees with the Senate report’s conclusions.
“We remain focused on continuing to deliver lower costs, better access and higher quality care for the people we serve, including those in Medicare Advantage,” the spokesman said.
The company has also described the Journal’s reporting as “incomplete and inaccurate,” while confirming it is cooperating with multiple federal investigations, including civil and criminal probes disclosed last July.
How UnitedHealth Collected Diagnoses
According to the Senate report, UnitedHealth relied on several coordinated strategies to identify payment boosting diagnoses.
These included:
• Sending nurses to patients’ homes through its Optum HouseCalls program
• Offering financial incentives to physicians for recording new diagnoses
• Using artificial intelligence and data analytics to scan medical records for missed conditions
Investigators said the company “appears to use all of these mechanisms to the utmost degree.”
Internal documents reviewed by the committee included training manuals, clinical guidelines, quality control records, and internal studies that outlined how staff should document specific conditions.
In some cases, the guidelines encouraged diagnoses without standard medical confirmation tests.
Questionable Diagnostic Standards Cited in Report
The Senate report highlights several examples where UnitedHealth’s internal guidance diverged from typical medical practice.
Atrial Fibrillation
Employees were trained to diagnose atrial fibrillation based on medication history alone, without requiring electrocardiogram testing, even though ECGs are normally used to confirm the condition.
Chronic Obstructive Pulmonary Disease
For COPD, the company instructed providers that lung function tests should confirm diagnosis, but also permitted recording the condition without test results.
Opioid Dependence
Providers were advised to diagnose opioid dependence in patients taking prescribed pain medication, even when the drugs were used as directed. Broader medical standards typically reserve that diagnosis for patients who misuse opioids.
When treatment ended, staff were instructed to continue diagnosing patients as having opioid dependence in remission, which still qualifies for higher payments.
The report said staff were not required to evaluate whether these guidelines were medically appropriate, only whether they supported valid billing under Medicare rules.
Diabetic Cataracts Example Raised Alarm
One of the most striking findings involved diabetic cataract diagnoses.
The Journal previously reported that UnitedHealth recorded diabetic cataracts in patients who had already undergone cataract removal surgery, a diagnosis that physicians say should not apply after surgery.
During a Senate confirmation hearing, CMS Administrator Mehmet Oz described such diagnoses as “anatomically impossible.”
The Senate report confirmed that internal guidelines instructed employees to continue coding diabetic cataracts after surgery had already occurred. The report says UnitedHealth later reversed the policy, though it does not specify when.
UnitedHealth maintains its cataract coding complied with national guidelines.
Peripheral Artery Disease Screening and QuantaFlo
The investigation also examined UnitedHealth’s use of the QuantaFlo device, which was used during home visits to screen for peripheral artery disease.
Nurses and doctors previously told the Journal that the device produced frequent false positives. UnitedHealth reportedly received about $1.4 billion from Medicare for PAD diagnoses recorded during home visits between 2019 and 2021.
UnitedHealth has said its nurses were not required to use QuantaFlo and were expected to apply clinical judgment. The company’s chief physician Wyatt Decker told the Journal in 2024 that testing for PAD “is super important” for improving patient outcomes.
According to the Senate report, UnitedHealth stopped using the device after Medicare changed payment rules last year and eliminated bonus payments tied to that diagnosis.
The company said it modified its screening approach to improve efficiency and expand other types of preventive checks during home visits.
Medicare Rule Changes Hit Financial Results
The overhaul of Medicare risk adjustment rules has had direct financial consequences for UnitedHealth.
The company disclosed last spring that reduced payments tied to diagnosis coding changes contributed to weaker financial performance, which triggered a sharp decline in its share price at the time.
Many of the diagnoses that no longer receive extra payments were conditions UnitedHealth had previously focused on identifying, according to internal documents reviewed by investigators.
For investors, this highlights how sensitive insurer earnings can be to regulatory shifts, especially in Medicare Advantage where profit margins depend heavily on reimbursement formulas.
What This Means for Investors and Medicare Policy
The Senate report does not accuse UnitedHealth of illegal behavior and does not issue formal recommendations. However, it adds political pressure at a time when Medicare Advantage programs are already facing tighter oversight.
Federal regulators have been increasing audits and adjusting risk models to curb what they view as excessive coding. Lawmakers from both parties have raised concerns that aggressive billing practices may be inflating costs for taxpayers.
If additional rule changes follow, insurers with heavy exposure to Medicare Advantage could face slower revenue growth and higher compliance costs.
UnitedHealth remains the largest Medicare Advantage provider in the country, giving it scale advantages but also making it a primary target for regulators and lawmakers seeking program reforms.
UnitedHealth Defends HouseCalls Program Outcomes
UnitedHealth continues to promote its HouseCalls program as beneficial to patients.
The company said the program connected 3.1 million seniors with medical services in 2025 and helped reduce emergency room visits and hospitalizations. It also says it maintains extensive quality controls to ensure diagnoses are accurate.
Critics, however, argue that even small changes in diagnosis coding can significantly impact federal spending, making the program vulnerable to financial abuse even when patient care appears adequate.
As federal investigations continue and payment rules evolve, Medicare Advantage remains one of the most politically sensitive and financially important segments of the healthcare industry.
For investors, the situation underscores growing regulatory risk across managed care stocks, especially for companies that depend heavily on government reimbursement models.
About Author
