Shares of UnitedHealth Group slipped Thursday after the health-care giant said it was under a Department of Justice investigation.
The company said it has started complying with both criminal and civil requests from federal investigators and it was cooperating with them.
“(UnitedHealth) has a long record of responsible conduct and effective compliance,” the company said in a Securities and Exchange Commission filing.
Earlier this year, The Wall Street Journal said federal officials had launched a civil fraud investigation into how the company records diagnoses that lead to extra payments for its Medicare Advantage, or MA, plans. Those are privately run versions of the government’s Medicare coverage program mostly for people ages 65 and over.
The company’s UnitedHealthcare business covers more than 8 million people as the nation’s largest provider of Medicare Advantage plans. The business has been under pressure in recent quarters due to rising care use and rate cuts.
The Journal said in February, citing anonymous sources, that the probe focused on billing practices in recent months.
The paper then said earlier this month that a federal criminal health care-fraud unit was investigating how the company used doctors and nurses to gather diagnoses that bolster payments.
UnitedHealth Group said that it reached out to the Justice Department “after reviewing media reports about investigations into certain aspects of the company’s participation in the Medicare program.”
UnitedHealth runs one of the nation’s largest health insurance and pharmacy benefits management businesses. It also operates a growing Optum business that provides care and technology support.
UnitedHealth raked in more than $400 billion in revenue last year as the third-largest company in the Fortune 500. Last year, its share price topped $630 to reach a new all-time high.
But company shares have mostly shed value since December, when UnitedHealthcare CEO Brian Thompson was fatally shot in midtown Manhattan on his way to the company’s annual investor meeting. A 26-year-old suspect, Luigi Mangione, has been charged in connection with the shooting.
In April, shares plunged after the company cut its forecast due to a spike in health care use. A month later, former CEO Andrew Witty resigned and the company withdrew its forecast.
The stock price slipped another 2%, or $5.12, to $287.39 Thursday morning. That represents a 54% drop from its all-time high.
UnitedHealth will report its second-quarter results next Tuesday.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
