UnitedHealth sinks as report of criminal probe adds to woes
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(Bloomberg) — UnitedHealth Group Inc. plummeted as much as 14% following a report that the insurer was under criminal investigation for possible Medicare fraud, adding to an already tumultuous week.
The Justice Department has had a probe into the company’s Medicare Advantage business since at least last summer, the Wall Street Journal reported, citing unidentified people familiar with the matter.
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UnitedHealth said in a statement late Wednesday that the Department of Justice hadn’t notified the company about the reported investigation.
“We stand by the integrity of our Medicare Advantage program,” it added.
Shares of the company fell as much as 7.1% before the start of regular trading in New York on Thursday. They’ve dropped every day for the last seven trading sessions, including sinking more than 17% Tuesday when the company abruptly replaced its chief executive officer and suspended 2025 guidance.
The nature of the potential criminal allegations against the insurer isn’t clear, the newspaper reported, citing the people.
Medicare Advantage
The alleged investigation piled further doubt on the company’s strategy to focus on Medicare, which pushed profit growth for years but has recently faltered.
UnitedHealth also faces growing scrutiny in Washington, as antitrust regulators challenge its planned purchase of home-health operator Amedisys Inc.
Insurers’ Medicare Advantage practices have drawn questions in recent years. Companies get paid more for taking care of sicker patients in the program, with rates determined by the diagnosis codes they submit. Watchdogs and whistleblowers have accused insurers of exaggerating how sick their patients are to boost profits, and some firms have paid large sums to resolve cases.
UnitedHealth faced allegations in a long-running civil Medicare fraud case that it improperly overcharged the US government by more than $2 billion. The company in March received a favourable finding in that case, bringing it a step closer to winning potential dismissal.
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