Federal and State Investigations and Lawsuit Involving UnitedHealthcare and Optum

Summary:  This article provides a comprehensive, fact-based review of federal and state investigations, regulatory enforcement actions, and civil litigation involving UnitedHealthcare, Optum, and their parent organization, UnitedHealth Group, spanning 2015 through 2025. Drawing exclusively from publicly available court records, government filings, enforcement actions, settlements, and regulator findings, it examines matters across Medicare Advantage risk adjustment, overpayment compliance, Medicaid and commercial operations, mental health parity enforcement, pharmacy benefit management, broker and sales practices, and controlled substance oversight. Each section documents who initiated the action, the alleged or substantiated conduct, the time period involved, the financial exposure or penalties at issue, and the current status of each matter, offering payers, providers, and compliance professionals a consolidated reference for understanding UnitedHealth Group’s regulatory and legal risk history.

Medicare Advantage Overpayment FCA Case (2011–2025)

Who: U.S. Department of Justice (Civil Division) and whistleblower Benjamin Poehling vs. UnitedHealth Group (UHG) – the nation’s largest Medicare Advantage insurer.

What: A False Claims Act lawsuit alleged UHG improperly inflated Medicare Advantage payments by "upcoding" diagnoses. UHG’s retrospective chart review program added diagnosis codes to increase risk scores without deleting those found unsupported, yielding billions in added payments. DOJ intervened in 2017, accusing UHG of ignoring evidence of invalid codes to avoid refunding overpayments. The government claimed UHG’s practices led to over $2 billion in excess Medicare payments from 2009 to 2016.

When: Whistleblower suit filed in 2011; DOJ joined in 2017. After years of litigation, a court-appointed special master in February 2025 found the DOJ’s evidence insufficient and recommended dismissing the case. In response, DOJ signaled it would likely appeal the dismissal.

Financial Impact: DOJ’s experts estimated UHG received $2.1 billion more than it should have. The lawsuit sought treble damages, but to date, UHG has not paid anything.

Status: Resolved in UHG’s favor (pending final court approval). In early 2025, the special master concluded DOJ failed to prove intentional fraud. Unless overturned on appeal, UHG will owe no FCA penalties.

Sources:  KFF Health News, Fierce Healthcare, Hospital Review

Challenge to CMS Overpayment Rule (2016–2022)

Who: UnitedHealthcare (and subsidiaries) vs. U.S. Department of Health & Human Services (HHS).

What: In 2016, UHC sued to overturn CMS’s "Overpayment Rule," which requires Medicare Advantage insurers to repay any funds received for unsupported diagnoses. UHC argued the rule was unfair because it didn’t account for underpayments. A federal district court initially sided with UHC, but the D.C. Circuit reversed, upholding the rule. The U.S. Supreme Court declined to hear the case in June 2022.

When: Rule promulgated 2014; UHC filed suit 2016; appellate decision Aug 13, 2021; Supreme Court certiorari denied June 21, 2022.

Financial Impact:  The Overpayment Rule compels UHC to return payments for unverified codes. UHC warned this could cost it hundreds of millions annually.

Status:  Resolved – Rule Upheld. The Supreme Court’s refusal to intervene leaves the D.C. Circuit’s pro-government ruling as final.

Sources:  Healthcare Dive, American Hospital Association

Mental Health Parity Enforcement Settlement (2021)

Who: U.S. Department of Labor (EBSA) and New York Attorney General vs. UnitedHealthcare’s insurance arms.

What: Regulators investigated UHC for violating the Mental Health Parity and Addiction Equity Act. UHC reduced out-of-network reimbursement rates for mental health services and implemented special reviews, leading to denials. In August 2021, UHC agreed to a $13.6 million settlement to reimburse patients, plus $2 million in penalties. UHC also agreed to cease the flagged practices.

When:  Investigations began in the mid-2010s; lawsuit filed in 2020; settlement announced Aug 11, 2021.

Financial Impact:  $15.6 million total paid by UHC.

Status:  Resolved. UHC implemented the required corrections and paid the agreed amounts.

Sources: Fierce Healthcare, Department of Labor

Massachusetts Deceptive Sales Penalties (2020–2024)

Who:  Massachusetts Attorney General vs. HealthMarkets Inc. (acquired by UHG in 2019).

What:  HealthMarkets engaged in deceptive sales of low-value supplemental health policies. In Dec 2022, a judge found UHG units liable. In Dec 2024, the court ordered $165.1 million in restitution and fines.

When:  Conduct 2012–2016; lawsuit filed Dec 2020; final ruling Dec 31, 2024.

Financial Impact: $165.1 million judgment. UHG is appealing.

Status: Resolved (on appeal). Unless overturned, the judgment stands.

Sources: Reuters, Massachusetts Government

Opioid Prescriptions Compliance Settlement (2013–2015)

Who:  U.S. DEA and DOJ; OptumRx Inc. (UHG PBM).

What: OptumRx improperly dispensed high-risk opioid combinations. In June 2024, it agreed to pay $20 million to settle violations of the Controlled Substances Act.

When:  Violations from 2013–2015; settlement announced June 27, 2024.

Financial Impact:  $20 million fine.

Status:  Resolved. OptumRx paid the fine and updated protocols.

Sources: Department of Justice

Ongoing Summary

As an FWA expert, PCG Software remains committed to updating this article on any and all Anthem/Elevance-related FWA or lawsuits so that you can keep abreast of all its legal dealings to ensure your organization, your patients, and your practice are safe. Subscribe to our blog for updates.