UnitedHealth Group (UNH) shares plunged 15% on Thursday, extending losses to over 50% in the past month as the company faces mounting challenges.
The steep decline was primarily fueled by reports that the Department of Justice is investigating UnitedHealth for possible criminal Medicare fraud related to its Medicare Advantage business. The DOJ's healthcare-fraud unit has been conducting the probe since at least last summer, according to sources familiar with the matter.
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Create account Try a demo Download mobile app Download mobile appUnitedHealth called the report "deeply irresponsible" and stated it hasn't been notified of any criminal investigation, adding that it stands by "the integrity of our Medicare Advantage program."
The news follows Tuesday's surprise announcement that former CEO Stephen Hemsley would replace Andrew Witty, sending shares down nearly 20% and prompting the company to withdraw its 2025 forecast.
UnitedHealth faces additional pressures from antitrust investigations, congressional scrutiny of its pharmacy benefits business, and the aftermath of a cybersecurity attack on its Change Healthcare subsidiary. The company is also dealing with fallout from the December killing of a top insurance executive.
These challenges emerge as the Trump administration and Congress look to reduce federal health spending, a key revenue source for UnitedHealth's success.
UNH.US (D1)
The stock is on its way to retest 2020 lows.
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