UnitedHealth Shares Down on Criminal Probe
UnitedHealth Group (NYSE:UNH) shares fell on Thursday, after the Wall Street Journal reported that the U.S. Department of Justice was investigating the company for potential Medicare fraud.
The latest news adds to the health insurer’s litany of woes, including multiple government inquiries into its business, a sudden change in top leadership and a pulled outlook in the face of soaring medical costs.
“UnitedHealth Group is mired in a crisis seemingly without end. Investors are bracing for another big bout of turbulence given reports of the DOJ investigation,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The company, however, said it had not been notified by the DOJ about the “supposed criminal investigation reported” and that it stood by “the integrity of our Medicare Advantage program”.
The health-care conglomerate’s stock sank 18% to a four-year low on Tuesday following the news. If premarket losses hold, UnitedHealth’s market capitalization will halve from $530 billion recorded on April 16, a day before a surprise earnings miss sparked a selloff in its shares.
UnitedHealth on Monday reinstated Stephen Hemsley as CEO, tasking the longtime leader with steering the healthcare giant through crises including federal probes, soaring costs and a cyber attack.
Shares in UNH began Thursday trading down $47.16, or 15.4% to $260.85.
