UnitedHealth (UNH) Faces DOJ Investigation, Stock Plummets
UnitedHealth Group (UNH) experienced a significant decline in stock value on Friday following reports of an investigation by the Department of Justice (DOJ) into its Medicare Advantage business.
The civil fraud investigation, as reported by the Wall Street Journal, examines UnitedHealth's coding practices for boosting payments from the Centers for Medicare and Medicaid Services (CMS). CMS provides private insurers with fixed payments for alternative Medicare coverage.
In response, UnitedHealth issued a statement denying the allegations. "The Wall Street Journal continues to misreport on the Medicare Advantage program. Our company adheres to industry-leading compliance standards during government reviews," the statement said.
This marks the sixth decline in UnitedHealth's stock this year and the second within the week. Earlier this week, the company reportedly offered buyouts to employees in its health insurance division, UnitedHealthcare, and considered layoffs as an alternative.
Over the past 12 months, UnitedHealth has faced numerous challenges:
* A widespread cybersecurity attack affecting over 190 million individuals
* Scrutiny from the DOJ regarding potential breakup
* A potential acquisition block by the Federal Trade Commission (FTC)
* The tragic death of its top insurance executive, Brian Thompson
The company's market capitalization has declined to $460 billion amidst these pressures, significantly impacting its growth prospects.
Anjalee Khemlani, Yahoo Finance's senior health reporter, covers various aspects of the healthcare industry including pharmaceuticals, insurance, and health policy.