UnitedHealth Stock Plummets Amid Payment Allegations and DOJ Scrutiny
UnitedHealth Group is experiencing turbulent times, with its stock price declining sharply following allegations of secret payments made to nursing homes. These payments were reportedly designed to minimize hospital transfers.
Allegations and Company Response
The alleged payments, aimed at cutting costs, reportedly endangered patient health, according to a report in The Guardian. UnitedHealth disputes these claims, stating that the Department of Justice investigated the matter and found "significant factual inaccuracies."
Ongoing Investigations and Challenges
Adding to the company's woes, UnitedHealth is also facing a separate criminal investigation by the DOJ related to potential Medicare fraud. This follows the unexpected departure of CEO Andrew Witty and the withdrawal of the company's 2025 forecast.
Analyst Downgrade and Leadership Changes
HSBC downgraded UnitedHealth's stock to "reduce," citing concerns over earnings growth. Former CEO Stephen Hemsley has returned to steer the company through this challenging period.
Broader Issues
UnitedHealth faces multiple challenges, including increased medical costs, pressure on drug pricing, and potential Medicaid funding cuts. A past cyberattack and scrutiny over Medicare billing practices further complicate the situation. Investor confidence in UnitedHealth is currently low.
