UnitedHealth Group Inc (NYSE:UNH, ETR:UNH) shares tumbled more than 14% after a Wall Street Journal (WSJ) report revealed that the US Department of Justice (DOJ) is conducting a criminal investigation into the company’s Medicare Advantage billing practices.
The report, citing unnamed sources, said the DOJ’s healthcare fraud division is examining whether UnitedHealth inflated patient risk scores to increase federal payments.
Prosecutors in New York have reportedly been working on the case since at least last year.
This criminal probe follows a civil investigation reported earlier this year, which focused on whether the company encouraged doctors to add diagnoses that would trigger larger payments.
UnitedHealth said it has not been formally notified of the DOJ’s investigation and criticized the WSJ’s coverage.
"The WSJ's reporting is deeply irresponsible, as even it admits that the 'exact nature of the potential criminal allegations is unclear.' We stand by the integrity of our Medicare Advantage program,” UnitedHealth said in a statement.
The investigation adds to a growing list of challenges facing the company. A few weeks ago, CEO Andrew Witty resigned unexpectedly, and the company has suspended its 2025 financial guidance amid rising medical costs.
UnitedHealth shares fell 14.7% to about $262 on Thursday afternoon.