The news: The Department of Justice (DOJ) is reportedly conducting a criminal investigation into UnitedHealth Group over possible Medicare fraud, according to the WSJ.

The exact nature of the criminal investigation is unclear, but it could be related to allegations that UnitedHealth gave doctors kickbacks for documenting medical conditions, which awarded higher payments for the health insurer’s Medicare Advantage business. In a statement, UnitedHealth called WSJ’s reporting “deeply irresponsible,” and said it hasn’t been contacted by the DOJ about a criminal investigation.

Zooming out: The DOJ in February launched a civil fraud investigation to see if UnitedHealth made up diagnoses for Medicare Advantage patients, per WSJ.

• Health insurers operating Medicare Advantage plans are paid more by the government when they care for patients who are sicker and have certain diagnoses, a process known as risk adjustment.
• 32.8 million people in the US are enrolled in a Medicare Advantage plan, accounting for 54% of the eligible Medicare population, per KFF.
• UnitedHealth is the largest MA provider, with about 29% market share.

Previous investigative reporting from WSJ and STAT revealed that UnitedHealth allegedly overbilled Medicare for conditions that doctors never treated, while in other cases financially rewarded physicians for seeing more patients so the insurer could get paid more by the government. For context, UnitedHealth employs or is affiliated with about 10% of US physicians.

Why it matters: Past claims of UnitedHealth’s billing fraud haven’t amounted to much. But a criminal investigation would signal that the DOJ may have gathered enough evidence during its civil probe that UnitedHealth committed a crime, such as giving doctors kickbacks.

Our take: The DOJ is showing that it has the appetite to take on the biggest healthcare company in the US.

It’s also an indicator that the government is serious about cracking down on Medicare Advantage overpayments and doesn’t want the program to continue being a cash-cow for commercial health insurers. These developments should be highly concerning to the other top players in the Medicare Advantage market, including Humana, BCBS plans, and CVS Health.