In this photo illustration the UnitedHealth Group logo displayed on a smartphone screen.
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UnitedHealth shares sank after The Wall Street Journal reported that the insurer’s Medicare billing protocols are under Justice Department investigation.
Shares of the Minnesota-based company slid 11.6% before the bell. That slide weighed on Dow Jones Industrial Average futures, which were down nearly 200 points.
The investigation is focused on UnitedHealth’s Medicare billing practices, sources familiar with the matter told the Journal. Specifically, it’s evaluating protocols for recording diagnoses that can lead to extra payments on the company’s Medicare Advantage plans.
UnitedHealth, 1-day
This civil probe is separate from a Justice Department antitrust probe, sources told the Journal. The department has also sued to stop UnitedHealth’s acquisition of home health firm Amedisys, citing antitrust concerns.
The DOJ and UnitedHealth did not respond immediately to CNBC’s requests for comment.
This investigation is the latest driver of attention on the blue-chip company, which is the largest private health insurer in the U.S. A gunman killed Brian Thompson, then-CEO of UnitedHealth’s insurance unit, in New York City late last year when the executive was in town for the company’s investor day. The shooting unleashed a flood of online complaints about U.S. healthcare.
Shares are down about 4% this week, a move that has pulled its year-to-date performance into the red. That builds on the loss of nearly 4% recorded in 2024.
Mizuho analyst Ann Hynes said that the pullback offers investors a chance to buy the dip on the stock, which she said is still an “attractive” investment over the long term. Hynes is in the majority on Wall Street with a buy-equivalent rating, per LSEG.
“We note that DOJ investigations are never good for a company, but we do believe there will be an incremental negative EPS impact for UNH as the company is already absorbing the impact through previous published regulatory changes,” Hynes wrote to clients, using the acronym for earnings per share. “We expect the DoJ probe to take years and will likely result in a monetary fine. We would be buyers of UNH on the weakness.”
