Optum remains a growth engine for UnitedHealth Group (NYSE: UNH) despite headwinds that battered the massive “payvider” during the first quarter of the year.

UnitedHealth Group, through its subsidiary Optum, is among the largest hospice providers in the nation by Medicare claims, according to research by Hospice News and the data analysis firm Hospice Analytics. This was achieved largely through the company’s 2023 acquisition of LHC Group for $5.4 billion.

Currently, Optum is battling it out in court with the U.S. Department of Justice, which seeks to block the subsidiary’s $3.3 billion purchase of Amedisys (Nasdaq: AMED). If that transaction closes, Optum would control 30% or more of the home health or hospice services in eight states, according to the DOJ’s complaint filed in court. The deal would expand Optum’s home health and hospice footprint to five additional states, allowing the company to gain nearly 500 locations in 32 states.

However, government funding reductions, transitions to a new Medicare Advantage risk adjustment model and heightened care activity led UnitedHealth Group to reduce its 2025 performance outlook to $24.65 to $25.15 earnings per share, down from a previously anticipated $26 to $26.50.

“UnitedHealth Group started 2025 in two seemingly disparate ways. One, continued strong growth across our businesses, our people are providing more health benefits and services to more members and patients as the market responds,” UnitedHealth Group Andrew Witty said in a first quarter earnings call. “The other way, however, was an overall performance that was, frankly, unusual and unacceptable.”

The company indicated that it expects to turn these results around as the year proceeds. First, they plan to ensure that the most complex patients impacted by Biden-era Medicare Advantage rate adjustments are engaged in clinical and value-based programs. The second pillar of their recovery plans is to bolster engagement with their members and patients in their homes and post-acute settings.

UnitedHealth Group and its subsidiaries are assessing and updating the health status of new patients, particularly those at high risk levels. The insurance and clinical services giant is also working to improve physicians’ clinical workflows to more effectively move into the MA risk adjustment model.

Each of these trends will shape the company’s Medicare Advantage plan designs and pricing for 2026, according to Witty.

On a consolidated basis, UnitedHealth Group’s first quarter 2025 revenues grew $9.8 billion year-over-year to $109.6 billion, driven primarily by serving people more comprehensively across the enterprise.

Despite the headwinds, Optum continues to grow. Optum earned $63.9 billion in revenue in Q1 2025, a year-over-year increase of $2.8 billion. The largest driver of this increase was OptumRx, the company’s pharmaceutical arm. Its clinical services business, Optum Health, brought in $23.3 billion.

“At Optum health, we continue to expect to add 650,000 new value-based care patients this year, we’re working to engage with these new members ever more rapidly,” UnitedHealth Group CFO John Rex said in the earnings call.