UnitedHealth shares drop after word of DOJ investigation
The Minnesota-based provider has faced a number of probes in recent years, primarily connected to its participation in the Medicare program.
MINNETONKA, Minn. — Shares of UnitedHealth Group dove early Thursday after the Minnesota-based health care giant confirmed it was under a Department of Justice investigation.
The company said Thursday in an SEC filing 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 says it has started complying with both criminal and civil requests from federal investigators and is working cooperatively 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 reported federal officials had launched a civil fraud investigation into how the company records diagnoses that lead to extra payments for patients in its Medicare Advantage, or MA, plans. Those options 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. UnitedHealth has been under pressure in recent quarters due to rising care use and rate cuts.
The Journal reported 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.
Company shares were down nearly 4%, or $11.51, to $281.12 before markets opened Thursday.
It has been a rocky stretch for UnitedHealth in recent months, with lawsuits from investors, a federal Investigation into billing practices, and the assassination of UnitedHealthcare CEO Brian Thompson in December of 2024.
“Really, all that I’ve seen them do today is acknowledge the investigation,” former insurance executive and current President and CEO of Fulcrum Strategies Ron Howrigon said. “I’ve yet to see United really come out and say, ‘Hey, you know, we’ve been wrong.'”
Howrigon says public perception of the company will take a hit because of this.
“You also have the consumers who are extremely angry about this, you know, they’re angry at insurance companies for not getting the care they want and again, and if this is true, they should be angry about them wasting our tax dollars on a program that, you know, doesn’t have a lot of money to waste,” he said.
Howrigon added that investigations like this take time and will likely rack up large fines and penalties.
“The fines and the penalties could range into the billions, easily into the billions. The profit level on Medicare Advantage for insurance companies enormous,” Howrigon said. “What most people don’t understand is the average profit per person that UnitedHealthcare makes on a Medicare Advantage member is about twice what they would make on the profit of covering you or I. It’s massively profitable and there’s billions of dollars flowing through that stuff. So these penalties could be crushing.”
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.
The provider raked in more than $400 billion in revenue last year as the third-largest company in the Fortune 500. Last year, UnitedHealth’s share price topped $630 to reach a new all-time high.
But company shares have mostly shed value since 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.
Here is the entire statement on the federal investigation from Thursday’s SEC filing.
UnitedHealth Group (the “Company”) proactively reached out to the Department of Justice after reviewing media reports about investigations into certain aspects of the Company’s participation in the Medicare program. The Company has now begun complying with formal criminal and civil requests from the Department. The Company has full confidence in its practices and is committed to working cooperatively with the Department throughout this process.
The Company has a long record of responsible conduct and effective compliance. Independent CMS audits confirm that the Company’s practices are among the most accurate in the industry, and, following a decade-long civil challenge by the Department to aspects of our Medicare Advantage business, a court-appointed Special Master concluded there was no evidence to support claims of wrongdoing.
To provide our stakeholders transparency and confidence in the Company’s practices, the Company, as previously announced, has proactively launched its own initiative to conduct third party reviews of policies, practices, and associated processes and performance metrics for risk assessment coding, managed care practices, and pharmacy services.
The Company is committed to maintaining the integrity of its business practices and serving as reliable stewards of American tax dollars.
Copyright 2025 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.