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Key Takeaways
- Shares of UnitedHealth Group sank Friday following a report that the U.S. Department of Justice is investigating the company’s diagnosing practices.
- The Wall Street Journal reported that the DOJ is probing whether the company tends to over-diagnose conditions that can earn larger Medicare Advantage payouts.
- UnitedHealth has criticized the newspaper’s previous reporting, saying “the Journal does not understand the Medicare Advantage program.”
UnitedHealth Group (UNH) shares are tumbling more than 10% Friday morning following a report that the U.S. Department of Justice is investigating the healthcare giant’s Medicare billing practices.
According to The Wall Street Journal, the DOJ is investigating whether UnitedHealth tends to over-diagnose conditions that can earn it extra payouts from the Medicare Advantage program. The newspaper had reported on allegations of the practice in December, with doctors telling the outlet they were trained to “document revenue-generating diagnoses, including some they felt were obscure or irrelevant.”
UnitedHealth Has Said WSJ ‘Does Not Understand’ Medicare Advantage Program
The DOJ and UnitedHealth did not immediately respond to Investopedia requests for comment.
UnitedHealth previously has criticized the Journal‘s reporting on Medicare Advantage. The company has said the reports “clearly demonstrate that the Journal does not understand the Medicare Advantage program,” calling the reporting a “one-sided, biased attack.”
The news was also weighing on other health insurer stocks Friday, with CVS Health (CVS), The Cigna Group (CI), and Humana (HUM) each down following the report. UnitedHealth shares were down 11% Friday morning, poised for their lowest open since last April.
