UnitedHealth Group’s shares dipped on Thursday after the company disclosed that it is under investigation by the Justice Department.
The healthcare giant indicated that it is cooperating with federal agents, responding to both criminal and civil inquiries.
In its filing with the Securities and Exchange Commission, UnitedHealth emphasized its history of compliant behavior and responsible practices.
Earlier in the year, the Wall Street Journal reported that federal officials had initiated a civil fraud investigation related to how specific diagnoses could lead to increased payments for Medicare Advantage plans, which are tailored versions of Medicare primarily for individuals aged 65 and older.
The UnitedHealthcare segment of the company is the leading provider of these Medicare Advantage plans, covering more than 8 million individuals. Recently, however, the company has faced challenges due to rising healthcare usage and interest rate cuts.
The Wall Street Journal also noted in February, citing anonymous sources, that the investigation was particularly focused on billing practices in recent months, as a result of which federal criminal inquiries into healthcare practices were also initiated.
UnitedHealth reached out to the Department of Justice following media reports regarding certain aspects of its Medicare program participation.
UnitedHealth boasts one of the largest health insurance and pharmacy benefit management operations in the country, in addition to its growing Optum division that provides healthcare technology support.
Last year, the company ranked as the third largest in the Fortune 500, with revenues surpassing $400 billion, and saw its stock touch an all-time high of over $630.
However, following the tragic shooting of CEO Brian Thompson on his way to an investor meeting, the company’s stock has dropped significantly. A 26-year-old suspect named Luigi Mangione has been charged in this incident.
In April, shares fell sharply after UnitedHealth downgraded its forecast due to rising healthcare utilization. A month later, former CEO Andrew Witty stepped down, and the company rescinded its predictions.
As of Thursday morning, shares had decreased another 2% ($5.12), marking a 54% downturn from their peak.
UnitedHealth is set to release its second-quarter results next Tuesday.
