A federal judge has allowed an investor lawsuit against UnitedHealth Group to move forward, rejecting the company's bid to dismiss the central claim that it inflated earnings by $3.3 billion in 2024. The ruling, issued Wednesday, lets the California Public Employees' Retirement System (CalPERS) pursue allegations that UnitedHealth concealed weakness in its Medicare Advantage business by manufacturing earnings.
The lawsuit's core allegation is that UnitedHealth hid an illegal practice of making Medicare Advantage patients appear sicker on paper to siphon more money from the government. According to the pension fund, the company used home visits to add diagnoses to patients' records without providing follow-up care, and pressured doctors to do the same using bonuses. The judge found these specific allegations sufficient to proceed, even as he dismissed most other claims against UnitedHealth.
In a partial win for the company, U.S. District Judge Jeffrey Bryan agreed that many of the statements cited by CalPERS were either not specific enough or amounted to typical promotional puffery that investors would not rely on. The case will now continue on the narrower allegation of concealing the diagnosis-coding scheme, while the broader claims of deception across multiple business areas have been dropped.