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UnitedHealth Group, Americas largest insurer, is facing yet another crisis. The companys stock price (NYSE: UNH) plummeted in early trading this morning after a new report alleged that the private insurance provider is facing a probe from the U.S. Department of Justice (DOJ) over its Medicare billing practices, a claim UnitedHealth Group denies. Heres what to know: UnitedHealths Medicare billing practices Shares in UnitedHealth Group fell this morning after the Wall Street Journal published a report stating that the $400 billion company was under investigation by the DOJ over its Medicare billing practices. The report states that the investigation is a civil fraud case and not a criminal one. At the heart of the investigation are DOJ concerns that UnitedHealth is recording patient diagnoses that generate additional payments to its Medicare Advantage plans. As the WSJ notes, UnitedHealth Group (aka UHG) and other insurers get lump sum payments from the federal government via the Medicare Advantage system. If patients have certain conditions, those lump sum payments can increase, generating more profit for insurers. Fast Company reached out to the DOJ for comment. The alleged investigation follows a December report from the WSJ in which the publication looked at billions of Medicare records. Those records allegedly showed that patients who joined Medicare Advantage plans saw huge increases in diagnoses that were more lucrative to UnitedHealth. Doctors said UnitedHealth . . . trained them to document revenue-generating diagnoses, including some they felt were obscure or irrelevant, the Journal reported. The company also used software to suggest conditions and paid bonuses for considering the suggestions, among other tactics, according to the doctors. In short, the DOJ may be concerned that UHG is trying to pad its bottom line by assigning unneeded diagnoses to patients in order to increase their taxpayer-fueled payments from the federal government. Reached for comment by Fast Company, a UnitedHealth Group spokesperson sent the following statement: “The Wall Street Journal continues to report misinformation on the Medicare Advantage (MA) program. The government regularly reviews all MA plans to ensure compliance and we consistently perform at the industrys highest levels on those reviews. We are not aware of the launch of any new activity as reported by the Journal. We are aware, however, that the Journal has engaged in a year-long campaign to defend a legacy system that rewards volume over keeping patients healthy and addressing their underlying conditions. Any suggestion that our practices are fraudulent is outrageous and false.” Yet another crisis for UHG The alleged DOJ civil fraud investigation is the second major recent crisis for UnitedHealth Group. On December 4, a gunman fatally shot Brian Thompson, CEO of UHG’s UnitedHealthcare unit, as he arrived for an early-morning investors conference in midtown Manhattan. Yet the murder of UnitedHealthcares CEO did not generate an outpouring of support for the company, as might be expected. Instead, it generated widespread glee on social media from Americans increasingly angry about the state of the countrys private healthcare industry, which many find unfair and unaffordable. That glee saw UnitedHealthcare and many other health insurers remove photos of their executives from their websites. UnitedHealth received further scorn after UnitedHealth Group CEO Andrew Witty published an ill-received op-ed in the New York Times, which generated an outpouring of new responses from Americans conveying the challenges theyve faced trying to get needed treatmentor getting UnitedHealth to pay for the treatment. In the aftermath of Thompsons killing and the public outcry from Americans about the struggles theyve faced with UnitedHealthcare, UnitedHealth Groups stock fell and hasnt recovered since. UNH shares fall again Before the public outcry against UnitedHealthcare began in early December, the UnitedHealth Groups stock price was trading at over $600 per share. By mid-December, it had fallen to below $500 per share. Today, the companys stock is even lower. As of the time of this writing, UNH shares are down nearly 9% on news of the alleged DOJ probe. Shares are currently trading below $460 each. As of todays fall, UNH shares are now down over 9.4% year-to-date. Over the past 12 months, UNH shares have fallen over 12%.
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E-Commerce
The prospect of banning the sale of so-called lab-grown meat might seem like a no-brainer in Nebraska, where beef is king, but some of the proposal’s staunchest opposition has come from ranchers and farming groups who say they can compete without the government’s help.Nebraska Gov. Jim Pillen one of the largest pork producers in the country is behind the push to ban cultivated meat, saying he wants to protect ranchers and meat producers. The Republican governor signed an executive order last August to keep state agencies and contractors from procuring lab-created meat, even though it could be years before such products are on store shelves.A number of ranchers and meat industry groups are pushing back on the governor’s plan.Dan Morgan is a fourth-generation cattle rancher from central Nebraska who supplies high-end beef to all 50 states and six countries. He welcomes companies seeking to produce lab-grown meat to “jump into the pool” and try to compete with his Waygu beef. Stifling competition in a free market should be anathema in a Republican-dominated state like Nebraska, he said.“It sounds like a bunch of right-wing Republicans echoing a bunch of left-wing Democrats,” he said, adding that the government should be limited to regulating the new product’s labels and inspecting its facilities to ensure food safety.“After that, it’s up to the consumer to make the decision about what they buy and eat.”Nebraska is among about a dozen states that have introduced measures to ban the manufacture, sale or distribution of lab-grown products. Two states Florida and Alabama have already enacted such bans.The target of the bills is “cell-cultivated” or “cell-cultured” meat, which is grown from the cells of animals in bioreactor steel tanks. The cells are bathed for weeks in nutrients, prompting them to grow and divide, turning them into skeletal muscle, fat and connective tissues.The push to ban cultivated meat comes well before the innovation could be considered an industry. While more than two dozen companies are working to develop such meat products, only two Upside Foods and Good Meat, both based in California have been approved by the federal government to sell cultivated chicken in the U.S. Even then, none of the companies are close to mass producing and selling the products on store shelves.In recent weeks, supporters of the Nebraska bill have shifted their arguments from industry protection to questions of safety surrounding cell-cultured meat. That includes its sponsor, state Sen. Barry DeKay, a Nebraska rancher, and Sherry Vinton, the director of the Nebraska Department of Agriculture. Both testified in support of the bill at a committee hearing earlier this week, calling cultured meat “synthetic food” and voicing concern about possible health implications from eating it.But it’s been no secret that the push for a ban is rooted in shielding Nebraska’s traditional meat industry. Nebraska tops all other states for beef production and beef exports, according to the Nebraska Department of Agriculture.Pillen named the ban among his top priorities during his State of the State address last month.“The backers of these products are cut from the same cloth as the anti-farmer activists who want to put our agriculture producers out of business, and we need to recognize them as such,” he said.The Association for Meat, Poultry and Seafood Innovation, the lobbying group for the emerging cultured meat industry, disputes Pillen’s insistence that it’s a threat to the traditional meat industry, noting studies that show global demand for meat-based protein will double by 2050.“We’re really a complementary component here,” said Suzi Gerber, executive director of the association. “So it’s a little bit mystifying to me why any individual stakeholder would see this as a threat.”Several farm organizations, including Nebraska Farm Bureau, Nebraska Cattlemen and the Nebraska Pork Producers, agree they’re not worried about competition from the emerging industry. Those groups prefer a sister bill that would only require they be clearly labeled as lab-grown products to separate them from traditional meat. More than a dozen states have also issued similar labeling bills, and some like Colorado have seen ban efforts abandoned in favor of labeling measures.Paul Sherman is an attorney with the Institute for Justice, which is representing Upside Foods in its lawsuit challenging the Florida ban. He said it’s no surprise most of the proposed bans are being pushed by those with connections to traditional agriculture.“I think it certainly shows that the purpose of these laws isn’t about protecting public health and safety,” he said. “It’s about protecting traditional agriculture from economic competition. And that is not a legitimate use of government power.” Maregery A. Beck, Associated Press
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E-Commerce
In a James Bond shakeup that stirred the film industry, Amazon MGM announced Thursday that the studio has taken the creative reins of the 007 franchise after decades of family control. Longtime Bond custodians Michael G. Wilson and Barbara Broccoli said they would be stepping back.Amazon MGM Studios, Wilson and Broccoli formed a new joint venture in which they will co-own James Bond intellectual property rightsbut Amazon MGM will have creative control.Financial terms weren’t disclosed. The deal is expected to close sometime this year.“With my 007 career spanning nearly 60 incredible years, I am stepping back from producing the James Bond films to focus on art and charitable projects,” Wilson said in a statement. “Therefore, Barbara and I agree, it is time for our trusted partner, Amazon MGM Studios, to lead James Bond into the future.”Amazon bought MGM Studios in 2022 for $6.1 billion, a purchase that was significantly motivated by the acquisition of one of the movies’ most beloved and long-running franchises. Since the Daniel Craig era of 007 concluded with 2021’s No Time to Die, Broccoli and Wilson have reportedly clashed with Amazon MGM over the direction of Bond.The announcement Thursday means that for the first time in the more than half a century of Bond, a Broccoli won’t be greenlighting the next 007 film, or picking who inherits his tux. Amazon MGM also anticipates expanding the franchise beyond movies.“We are grateful to the late Albert R. Broccoli and Harry Saltzman for bringing James Bond to movie theaters around the world, and to Michael G. Wilson and Barbara Broccoli for their unyielding dedication and their role in continuing the legacy of the franchise that is cherished by legions of fans worldwide,” said Mike Hopkins, head of Prime Video and Amazon MGM Studios. “We are honored to continue this treasured heritage, and look forward to ushering in the next phase of the legendary 007 for audiences around the world.”Bond had been a family business since Albert “Cubby” Broccoli secured the rights to adaptations of Ian Fleming’s novels and kicked off a run of 25 Bond films produced by Eon Productions, beginning with 1962’s Dr. No. Those movies have accrued $7.6 billion in box office.In 1995, the elder Broccoli handed over control of Eon to his daughter, Broccoli, and stepson, Wilson. In recent years, the 64-year-old Broccoli has largely taken the lead as Wilson, 83, has aged into retirement.“My life has been dedicated to maintaining and building upon the extraordinary legacy that was handed to Michael and me by our father, producer Cubby Broccoli,” Broccoli said in a statement. “I have had the honor of working closely with four of the tremendously talented actors who have played 007 and thousands of wonderful artists within the industry. With the conclusion of ‘No Time to Die’ and Michael retiring from the films, I feel it is time to focus on my other projects.”Broccoli and Wilson’s previous standoff with Amazon MGM had essentially frozen development on the next Bond movie. No script, director or star has yet been announced for the next installment, an unusually long break for a franchise that has typically spaced films two or three years apart. Broccoli also produced the 2022 film Till and the musical Buena Vista Social Club, opening next month on Broadway.A key point for the producers in the Amazon acquisition of MGM was a commitment to theatrically release James Bond films. That Bond’s future is now in the hands of an e-commerce giant with one of the leading streaming services will immediately prompted doubts from some fans about Bond’s new corporate overloads. Other billion-dollar movie franchises, such as the Disney-owned Star Wars and Marvel brands, have in recent years struggled with over-saturation.Even Joe Russo, codirector of four Marvel Cinematic Universe films including Avengers: Endgame, pleaded to Amazon MGM: “DON’T cinematic universe James Bond.”“It is one of our last, great theatrical events,” Russo said on X. “Don’t dilute that with a plethora of streaming spin-offs.”In an interview last fall ahead of receiving an honorary Oscar alongside her brother, Broccoli told the Associated Press that, in an era of upheaval in the movie industry, boldness was necessary.“People are playing it very safe,” Broccoli said. “I think in times of crisis like this, you’ve got to be brave.” Jake Coyle, AP Film Writer
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E-Commerce
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