The Justice Department has reportedly launched an antitrust investigation into UnitedHealth, the nation’s largest health insurer and a top manager of pharmacy benefits and physician groups. Investigators have been digging into the relationship between the company’s insurance unit, which covers roughly 50 million people, and its Optum health services unit, which employs about 90,000 doctors, The Wall Street Journal reports.
“Investigators have asked whether UnitedHealthcare favored Optum-owned groups in its contracting practices, potentially squeezing rival physicians out of certain types of attractive payment arrangements,” the Journal’s Anna Wilde Mathews and Dave Michaels write. “Investigators have also explored whether Optum’s ownership of healthcare providers could present challenges to health insurers that are rivals to UnitedHealthcare.”
Among the issues being investigated is the company’s compliance with an Affordable Care Act limit on the share of patient premiums that health insurers can put toward administrative costs and profits. The law requires insurance companies to spend at least 80% or 85% of those premium dollars on care. But when the same company owns the insurer and the care providers, it can ultimately collect more than the cap allows.
Government officials are reportedly also looking into UnitedHealth’s Medicare billing practices.
This isn’t the first time the company has come under intense scrutiny or faced an antitrust probe. “UnitedHealth has drawn criticism for years as it has expanded its reach across the health-care system,” Bloomberg’s John Tozzi, Chris Strohm, and Leah Nylen note. “Optum’s clinics, home-care services, drug plans and pharmacies frequently provide services to UnitedHealthcare members, allowing the company to turn expenses in its insurance business into revenue for Optum. That arrangement has helped power UnitedHealth’s growth over rivals, a strategy that competitors have attempted to replicate. But the arrangement has also drawn criticism from antitrust regulators.”
Spokespeople for UnitedHealth and the Justice Department declined to comment to the Journal and Bloomberg.
