https://x.com/RepJayapal/status/1923387362471489933
UnitedHealth Group shares dropped sharply after a report that the Department of Justice is conducting a criminal investigation into the health insurance giant over potential Medicare fraud. The exact nature of the allegations is unclear, but the probe is reportedly focused on the company’s Medicare Advantage business practices. The news comes just a day after UnitedHealth retracted its financial forecast and announced the departure of CEO Andrew Witty.
https://x.com/LorenAdler/status/1923385501165211727
The company’s shares have fallen nearly 50% this year following a series of setbacks, including a historic cyberattack, higher-than-expected medical costs, and public backlash after the murder of a UnitedHealthcare executive. In a statement, UnitedHealth said it has not been notified by the DOJ about the reported investigation and called the reporting “deeply irresponsible.” The company added, “We stand by the integrity of our Medicare Advantage program.”
This is the second time this year that UnitedHealth’s Medicare Advantage business has come under federal scrutiny.
https://x.com/BevTchangMD/status/1924090307185938887
In February, it was reported that the DOJ was conducting a civil investigation into whether the company inflated diagnoses to trigger extra payments to its Medicare Advantage plans.
Medicare fraud probe sparks decline
UnitedHealthcare’s Medicare and retirement segment, which includes the Medicare Advantage business, is the company’s largest revenue driver, generating $139 billion in sales last year. The reported investigation follows the surprise replacement of CEO Andrew Witty by the company’s former longtime chief executive, Stephen Hemsley.
UnitedHealth has lost over $300 billion of its $600 billion market cap in the past month, and there is a risk the company could be removed from the Dow Jones Industrial Average unless it demonstrates greater consistency, according to Jared Holz, a Mizuho health-care equity strategist. The Department of Justice has not responded to requests for comment on the reported investigation. Senator Chuck Grassley has also initiated an inquiry into UnitedHealth’s billing methods, demanding detailed compliance records.
UnitedHealth has been a dominant force in the health insurance market for decades, particularly through its involvement in the Medicare program, which covers medical costs for elderly people. The company’s recent troubles have raised concerns among investors and could lead to significant changes in its business strategy.