UnitedHealth Group Inc (NYSE:UNH, ETR:UNH) shares fell more than 4% following a report by The Guardian which alleged the company secretly paid nursing homes substantial bonuses to reduce hospital transfers of sick residents.
The practice was reportedly part of a broader cost-cutting strategy aimed at lowering expenses for UnitedHealth's Medicare Advantage business, saving it millions of dollars.
The report raised concerns that the bonus payments, at times, put residents’ health at risk by discouraging necessary hospital care.
The Guardian's report was based on thousands of confidential corporate and patient records, court files, interviews with current and former employees, and whistleblower declarations submitted to Congress.
UnitedHealth denied the allegations, calling claims that its staff blocked hospital transfers "verifiably false.”
It told The Guardian that its bonus payments to nursing homes stopped unnecessary hospitalizations and its partnership with nursing homes improved health outcomes.
The report adds to numerous challenges currently facing UnitedHealth, including a separate Department of Justice criminal investigation into possible Medicare fraud, the sudden resignation of CEO Andrew Witty, and the withdrawal of the company's 2025 financial outlook amid rising medical costs.
Shares traded down 4.3% at about $308 on Wednesday morning, down almost 40% in the year to date.