Shares of UnitedHealth Group dropped Thursday after the company revealed it is under investigation by the U.S. Department of Justice.
In a filing with the
Securities and Exchange Commission
, UnitedHealth said it is cooperating with both criminal and civil inquiries and has begun providing information requested by federal investigators.
“UnitedHealth has a long history of responsible conduct and strong compliance,” the company said in the filing.
The investigation appears to stem from concerns over billing practices tied to the company’s Medicare Advantage plans—a government-backed program run by private insurers for seniors. Earlier this year,
The Wall Street Journal
reported that federal officials had launched a civil fraud probe into whether UnitedHealth improperly reported diagnoses that triggered higher payments from the government.
UnitedHealthcare, a subsidiary of UnitedHealth Group, is the country’s largest provider of Medicare Advantage coverage, insuring over 8 million Americans. The division has recently faced headwinds due to increasing health care utilization and reimbursement rate cuts.
Although the
company
said in February it was unaware of any new investigations, it confirmed Thursday that it had contacted the Justice Department after media reports highlighted federal scrutiny of its Medicare-related practices.
Beyond insurance, UnitedHealth also operates a major pharmacy benefits manager and its fast-growing Optum business, which offers health care services and technology solutions.
The company’s stock has declined steadily since December, when UnitedHealthcare CEO Brian Thompson was shot and killed in Manhattan while en route to the company’s annual investor meeting. On Thursday morning, UnitedHealth shares fell 1.7%, or $4.97, to $287.54.
