UHG Lawsuit: AI Denials, DOJ Probe, and Securities Fraud

UnitedHealth Group is currently defending itself in a sprawling set of lawsuits and government investigations that touch nearly every part of its business. The active UnitedHealth Group lawsuits include a class action over an AI tool used to deny Medicare Advantage care, a federal criminal probe into Medicare billing, securities fraud claims led by the country’s largest public pension fund, multidistrict data breach litigation covering roughly 193 million people, an antitrust settlement forcing the divestiture of 164 home health and hospice facilities, an FTC insulin pricing case, and enforcement actions from several state attorneys general.

The nH Predict AI Denial Class Action

The lawsuit drawing the most attention is Estate of Gene B. Lokken et al. v. UnitedHealth Group, Inc. et al., filed in November 2023 in the U.S. District Court for the District of Minnesota on behalf of families of two deceased Medicare Advantage members.¹

The plaintiffs allege that UnitedHealthcare and its subsidiary naviHealth (now Home & Community Care) used a predictive model called nH Predict, deployed in July 2019, to cut off post-acute care once the algorithm projected a patient’s recovery timeline was up, regardless of what the treating physician said. Employees who deviated from the model allegedly faced discipline or termination.² The complaint claims the tool has a 90% error rate, but only about 0.2% of policyholders appeal.³

In February 2025, Judge John Tunheim dismissed five of the seven original counts on Medicare preemption grounds but allowed breach of contract and breach of the implied covenant of good faith and fair dealing to proceed.⁴ Notably, the judge waived the requirement to exhaust internal appeals, calling the UnitedHealthcare process “futile” in light of allegations that the company repeatedly denies claims and pays at the last stage of appeal to avoid judicial review.³

In March 2026, a federal magistrate ordered UnitedHealth to produce documents dating back to January 2017, including post-acute care policies, records related to the naviHealth acquisition and projected cost savings, internal AI review board materials, and compensation data for the medical directors and care coordinators who handled denials for 300 putative class members.⁵ The case is in active discovery.¹

UnitedHealth’s position is that nH Predict is a care-support tool, not a claims adjudication system, and that qualified physicians make medical necessity determinations following CMS guidance.⁵

The private case sits alongside government findings. An October 2024 report from the U.S. Senate Permanent Subcommittee on Investigations found that UnitedHealthcare’s denial rate for skilled nursing facility prior authorization requests rose from 1.4% to 12.6% between 2019 and 2022, the first full year nH Predict was in use.⁶ A June 2026 HHS Office of Inspector General report showed the company denied 71% of prior authorization requests for long-term care hospitals and 66% for inpatient rehabilitation facilities; when patients appealed skilled nursing denials handled by naviHealth, Medicare Advantage plans overturned 97%.⁷

The DOJ Criminal Medicare Investigation

On July 24, 2025, UnitedHealth Group disclosed that it was complying with “formal criminal and civil requests” from the Department of Justice concerning its participation in Medicare.⁸ The Wall Street Journal reported that the probe is being run by the healthcare-fraud unit of the DOJ’s criminal division and had been active since at least summer 2025.⁹ The company said it had “full confidence in its practices” and pointed to a prior decade-long civil challenge in which a court-appointed Special Master found no evidence of wrongdoing. UnitedHealth also launched third-party reviews of its risk-assessment coding, managed care practices, and pharmacy services.¹⁰

Securities Fraud Suits

CalPERS Class Action

Filed in May 2024 in the District of Minnesota and amended in March 2025, the CalPERS-led securities class action covers investors who purchased UnitedHealth stock between September 22, 2021, and February 20, 2025.¹¹ The complaint alleges several overlapping schemes:

Medicare Advantage upcoding, including “buddy codes” that append diagnoses to existing ones and use of the “HouseCalls” in-home visit program to surface diagnoses that were not medically supported.¹²
Circumventing the Affordable Care Act’s Medical Loss Ratio by having the insurance arm pay inflated rates to Optum-owned clinics, effectively reclassifying profit as medical spending.¹²
Insider trading by four senior executives, including board chair Stephen Hemsley, who together sold about $101.5 million in stock after learning of a non-public DOJ antitrust probe and before it became public in February 2024; Hemsley alone sold $85 million.¹³
Failure to build the technological firewalls between UnitedHealthcare and Optum services that the company had described to investors and the DOJ.¹²

Named defendants include UnitedHealth Group, the late UnitedHealthcare CEO Brian Thompson, former CEO Andrew Witty, and Hemsley. As of mid-2025, UnitedHealth was scheduled to move to dismiss the amended complaint.¹²

Faller v. UnitedHealth Group

A separate suit filed on May 7, 2025, in the Southern District of New York followed the December 2024 murder of UnitedHealthcare CEO Brian Thompson. The complaint alleges the company reaffirmed its financial outlook in January 2025 while quietly shifting its claims-denial strategy in response to public backlash, and that when UnitedHealth lowered 2025 earnings guidance on April 17, 2025, the stock fell more than 22%.¹⁴ CalPERS moved in May 2025 to intervene and transfer the case to Minnesota for consolidation with its own action.¹⁵

In April 2024, Senators Elizabeth Warren and Edward Markey and 16 other lawmakers urged the SEC to open an insider trading investigation into UnitedHealth executives, naming Hemsley. It is not confirmed whether the SEC opened a formal enforcement action in response.¹³

Change Healthcare Data Breach Litigation

On February 21, 2024, the hacker group ALPHV/BlackCat launched a ransomware attack on Change Healthcare, the health technology company UnitedHealth acquired in 2022. The attackers exploited a portal without multi-factor authentication and exposed personal and medical data of roughly 192.7 million people. UnitedHealth paid a $22 million Bitcoin ransom that did not stop the release of data, and has reported about $3.1 billion in direct breach response costs.¹⁶

About 50 patient and provider suits were consolidated in June 2024 into In Re: Change Healthcare, Inc. Customer Data Security Breach Litigation (MDL No. 3108) in the District of Minnesota, before Judge Donovan W. Frank. Patient claims focus on exposure of personal health information; provider claims focus on the months-long disruption to claims processing and reimbursement. In December 2025, the court granted in part and denied in part motions to dismiss on both tracks. Fact discovery is set to close in November 2026, and the court has directed the parties to prepare for settlement talks.¹⁷

Nebraska Attorney General Mike Hilgers filed a parallel state suit in December 2024 against Change Healthcare, UnitedHealth, and Optum for violations of state consumer protection and privacy laws, alleging security failures and delayed notification of nearly 900,000 affected Nebraskans. A Lancaster County judge denied the defendants’ motion to dismiss in November 2025, and the case is in discovery.¹⁸

Antitrust: Amedisys Divestiture

On November 12, 2024, the DOJ Antitrust Division and the attorneys general of Maryland, Illinois, New Jersey, and New York sued to block UnitedHealth’s proposed acquisition of Amedisys under the Clayton Act, alleging harm to competition in local home health, hospice, and nurse labor markets.¹⁹

A proposed consent decree filed on August 7, 2025, in the District of Maryland requires UnitedHealth to divest at least 164 home health and hospice facilities across 19 states, with eight additional locations if regulatory approval for the primary divestitures falls through, to approved buyers including BrightSpring Health Services and The Pennant Group. More than 1,800 employees must transfer, and UnitedHealth must provide transition services for up to a year.²⁰ Amedisys separately agreed to a $1.1 million civil penalty for falsely certifying complete responses under the Hart-Scott-Rodino Act and to implement antitrust compliance training.²¹ As of mid-2026, the court was reviewing the government’s response to public comments before entering final judgment.¹⁹

FTC Insulin Pricing Case Against Optum Rx

In September 2024, the FTC sued the three largest pharmacy benefit managers, including UnitedHealth’s Optum Rx, alleging they steered patients toward higher-cost insulins to collect larger manufacturer rebates and created a system where “drug manufacturers compete for formulary placement by raising (not lowering) drug list prices.”²² Express Scripts and CVS Caremark settled in February and March 2026. On June 12, 2026, Optum Rx and the FTC jointly agreed to withdraw the case from adjudication to pursue a consent agreement. Terms have not been disclosed.²³ Optum Rx has denied the allegations, saying its health plan members currently pay an average of $12 per month for insulin.

State Attorney General Actions

Massachusetts: $100 Million Medicaid Fraud Suit

On May 29, 2026, Massachusetts Attorney General Andrea Joy Campbell sued UnitedHealthcare in Suffolk Superior Court, alleging the company defrauded the state’s MassHealth Medicaid program of at least $100 million between 2015 and 2025. The complaint claims UnitedHealthcare manipulated member health assessments in its Senior Care Options plan, classifying members as needing higher-intensity behavioral health or medical care without corresponding diagnoses and submitting assessments claiming members required daily skilled nursing services they neither needed nor received. Internal reviews reportedly flagged the issue as early as 2018.²⁴ UnitedHealthcare has called the suit “meritless.”²⁵

West Virginia: Opioid Allegations Against Optum

On December 8, 2025, West Virginia Attorney General JB McCuskey sued Optum in the Northern District of West Virginia, alleging the company conspired with drug manufacturers to increase opioid sales. The complaint claims Optum doubled daily dosage limits during the crisis, penalized clients that imposed dispensing restrictions, ran a “Pay to avoid PA” program letting manufacturers bypass prior authorization safety checks, and sold internal data to help manufacturers target high-volume prescribers. The state brought claims under the West Virginia Consumer Credit and Protection Act and federal RICO, among others.²⁶ Optum denied the allegations, saying the suit “misrepresents Optum’s longstanding commitment to addressing a public health crisis that it neither caused nor encouraged.”²⁷

Other State Enforcement

Additional actions include a $475,000 fine from the California Department of Managed Health Care for failing to timely implement independent prior authorization review decisions, $450,000 in penalties from the Delaware Department of Insurance for mental health parity violations, and a $165 million restitution and penalty order from a Massachusetts state judge against three UnitedHealth-owned insurance companies for a deceptive sales scheme involving supplemental products.²⁸

Ballad Health Provider Lawsuit

On October 21, 2025, Ballad Health, a health system in the Appalachian region, sued UnitedHealth Group in the Eastern District of Tennessee, claiming more than $65 million in damages over five years.²⁹ The complaint alleges systematic denial, delay, and underpayment of medically necessary claims, including through use of nH Predict, and further accuses UnitedHealth of manipulating Medicare Advantage patient diagnoses through in-home HouseCalls visits and offshore coders to increase risk-adjusted payments. Ballad also alleges UnitedHealth uses its vertically integrated structure to circumvent the ACA Medical Loss Ratio by routing payments through Optum clinics.³⁰ The case is before Judge Clifton L. Corker with briefing ongoing as of mid-2026. Ballad has said it will not renew its Medicare Advantage contract with UnitedHealth when the current agreement expires on June 30, 2027.³¹

Recently Resolved: ERISA and DOL Settlements

Two significant cases have already settled. In Snyder v. UnitedHealth Group, Inc., the company agreed to a $69 million settlement of ERISA claims that it breached fiduciary duties by keeping its 401(k) plan invested in underperforming Wells Fargo Target Date Funds. The settlement, covering more than 350,000 participants and beneficiaries invested in those funds between April 23, 2015, and the present, received final court approval in June 2025 in the District of Minnesota; eligible class members receive a pro rata share without filing a claim.³²

Separately, in March 2025 the Western District of Wisconsin approved a $20.25 million Department of Labor settlement with UnitedHealth subsidiary UMR Inc. The government had alleged that UMR used automated protocols to deny emergency room claims without considering the patient’s experience and to deny urine drug screening claims without assessing medical necessity. UMR agreed to stop using those protocols and to notify the Labor Department before reinstating them.³³

Congressional Investigations

In August 2025, Senate Finance Committee Ranking Member Ron Wyden and Senator Elizabeth Warren opened a formal investigation into allegations that Optum padded revenues by reducing hospitalizations for nursing home enrollees, potentially denying lifesaving care. They renewed the inquiry in January 2026 with “heightened alarm” after reports that at least three nursing home residents had died, calling UnitedHealth’s initial responses “inadequate and non-responsive.”³⁴

1
Georgetown Law Litigation Tracker. Estate of Gene B. Lokken et al. v. UnitedHealth Group, Inc. et al.
2
Georgetown Law Litigation Tracker. Estate of Gene B. Lokken et al., Complaint
3
Courthouse News Service. Federal Judge Dismisses Several Claims in AI Denial Lawsuit Against UHG but Case Will Proceed
4
Healthcare Finance News. Class Action Lawsuit Against UnitedHealth’s AI Claim Denials Advances
5
Becker’s Payer. Judge Orders UnitedHealth to Hand Over Broad Discovery in AI Coverage Denial Case
6
McKnight’s. Senate Report Hits Top 3 Medicare Advantage Insurers Over Refusal of Skilled Nursing, Other Coverage
7
Star Tribune. Report Finds High Denial Rates at UnitedHealth, Two Other Medicare Advantage Plans
8
UnitedHealth Group. UHG Responds to DOJ Investigation
9
Wall Street Journal. UnitedHealth Medicare Fraud Investigation
10
CNN. UnitedHealth Investigation DOJ
11
STAT News. CalPERS, Largest Pension Fund, Claims UnitedHealth Cheated Investors by Concealing Medicare Advantage Scheme
12
Insurance News Net. Lawsuit Alleges Securities Fraud, Profit-Boosting Scheme at UnitedHealth Group
13
U.S. Senator Elizabeth Warren. Warren, Markey, Auchincloss, and 13 House Members Urge SEC to Open Investigation Into UnitedHealth Executives’ Insider Trading Concerns
14
Becker’s Payer. UnitedHealth Shareholder Sues Over Corporate Strategy Following CEO Murder
15
ALM Assets. UnitedHealth Motion to Intervene
16
Security.org. UnitedHealthcare Data Breach
17
U.S. District Court, District of Minnesota. Change Healthcare, Inc. Data Breach
18
Nebraska Attorney General. Court Allows Attorney General Hilgers’ Case Against Change Healthcare to Proceed
19
Federal Register. United States et al. v. UnitedHealth Group Incorporated et al.
20
U.S. Department of Justice. Justice Department Requires Broad Divestitures to Resolve Challenge to UnitedHealth’s Acquisition
21
Healthcare Finance News. DOJ Reaches Proposed Settlement Over UnitedHealth’s $3.3 Billion Acquisition of Amedisys
22
BenefitsPRO. Optum Rx Becomes Final PBM to Reach Settlement With FTC Over Insulin Pricing
23
Fierce Healthcare. Optum Rx, FTC Posed Settlement in Insulin Pricing Case
24
Massachusetts Attorney General. AG Campbell Sues United Healthcare for Defrauding MassHealth Out of $100 Million
25
Star Tribune. Massachusetts Attorney General Lawsuit Alleges $100M Fraud by UnitedHealthcare
26
West Virginia Attorney General. Attorney General Files Lawsuit Against United Health Contributing to Opioid Crisis
27
Becker’s Payer. West Virginia Sues UnitedHealth’s Optum Over Opioid Crisis
28
American Economic Liberties Project. UnitedHealth Group Abuse Tracker
29
Georgetown Law Litigation Tracker. Ballad Health et al. v. UnitedHealth Group, Inc. et al.
30
Ballad Health. Ballad Health v. UnitedHealth Group, Complaint
31
Ballad Health. Federal Lawsuit Against UnitedHealth
32
UnitedHealth Group ERISA Settlement. Snyder v. UnitedHealth Group, Inc. Settlement
33
Bloomberg Law. UnitedHealth Unit DOL $20 Million Claim Denial Deal Gets Nod
34
U.S. Senate Finance Committee. Wyden and Warren Demand Answers From UnitedHealth Group Following New Reports of Seniors Dying in Nursing Homes After Being Denied Care