The Dow Jones Industrial Average was in the red by lunchtime in New York, with UnitedHealth proving the biggest drag a day after a law firm announced that the US had joined a lawsuit alleging that the health insurer and others bilked the Medicare managed care programme out of millions of dollars.
The health insurer’s shares were down 3.7 per cent in midday trading, dragging the index overall into losses of 0.3 per cent.
The intervention was announced Thursday by the law firm Constantine Cannon, which represents the whistleblower, a former executive at a UnitedHealth subsidiary. It means that the US Justice Department will take a lead role in litigating the claims, which have been pending under seal since 2011 while prosecutors investigated the allegations.
If the suit is successful, UnitedHealth and other defendants may be ordered to pay as much as three times the amount of any damages established under the False Claims Act, which prohibits government fraud.
The gist of the allegations is that UnitedHealth overcharged the government’s Medicare programme, a health insurance scheme for the elderly, by receiving payments for claims that misstated or overstated beneficiaries’ diagnoses.
A UnitedHealth spokesman said:
“We reject these more than five-year-old claims and will contest them vigorously. We are honored to serve millions of seniors through Medicare Advantage, proud of the access to quality health care we provided and confident we complied with the program rules.”