UnitedHealth Group Hit with Derivative Action Over Alleged Medicare Fraud and Corporate Governance Breaches

A derivative action has been filed against UnitedHealth Group Inc. (NYSE:UNH) and its former leadership, alleging catastrophic corporate governance breaches that led to artificial earnings growth.

The complaint claims that executives made Medicare Advantage members appear sicker through unnecessary diagnoses, capturing $8.7 billion in federal funds in 2021 alone.

Plaintiffs also allege that the insurer used automated algorithms to systematically deny post-acute rehabilitation care, with beneficiaries who appealed prevailing 99.7% of the time.

The complaint further alleges that UnitedHealth Group routed above-market payments internally to bypass federal profit caps and that executives sold over $237 million in stock during the relevant period while material information about alleged misconduct remained undisclosed.