UnitedHealth Shares Plummet on DOJ Medicare Billing Probe: WSJ

UnitedHealth Group (UNH) shares tumbled early Friday following a report that the U.S. Department of Justice (DOJ) has launched a civil fraud investigation into the health care giant's Medicare billing practices. The Wall Street Journal, citing anonymous sources, reported that federal officials have begun a probe into how the company records diagnoses that lead to extra payments for its Medicare Advantage plans. Those are privately run versions of the government's Medicare coverage program, primarily for people ages 65 and over.

The probe is said to focus on billing practices in recent months. When asked for comment by The Associated Press, a UnitedHealth representative said they "will let you know if we have anything to say." The company's UnitedHealthcare business covers more than 7.8 million people as the nation's largest provider of Medicare Advantage plans. The business has been under pressure in recent quarters due to rising care use and rate cuts.

Shares of the Minnetonka, Minnesota, company sank more than 10%, shedding over $52 in pre-market trading to fall below $447. Shares of other prominent Medicare Advantage insurers like Humana were down as well. The investigation 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.

UnitedHealth has criticized the newspaper's previous reporting, saying "the Journal does not understand the Medicare Advantage program." The company noted that the government regularly evaluates plans tied to the 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 diagnosing practices.

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Shares of the Minnesota-based company slid 9%, weighing on the Dow Jones Industrial Average. The stock has dropped more than 12% this week, which would mark its worst weekly performance since 2020.

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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.

Mizuho analyst Ann Hynes said that 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."

Computer Communications
Volume 234, 15 March 2025, 108070
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Keywords
Agent-based modelling
Simulation
Healthcare systems
Resilience
Decision support
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This article is part of a special issue entitled: ICT-for-Disaster-Management published in Computer Communications.

The digital transformation of the healthcare sector is an essential development as societies move into a post-industrial, knowledge-based economy. The adoption of the latest technologies and their applications in the health and care systems must be managed effectively from the perspective of their cyber security and resilience. However, there is still a limited understanding of the key concepts that must define the strategic vision of a resilient and sustainable digital transformation of the healthcare sector. Using data collected at the peak of the COVID-19 pandemic from owners and C-level executives from critical infrastructure sectors in the United Kingdom, this research analysed core constructs that contribute to the required transformative, adaptive and absorptive capacities for health systems digital resilience. The research found that a balanced base of cyber security knowledge development, uncertainty management, and consideration for the sector’s high levels of systemic and organisational interdependence are essential for its digital resilience and for the sustainability of its digital transformation efforts. The paper describes the implications of these findings for research and management practice.

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Published: 17 October 2024
BMC Health Services Research volume 24, Article number: 1250 (2024) Cite this article
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Abstract
This study addresses the crucial need for resilient healthcare systems, highlighted by recent global health emergencies such as the Ebola and COVID-19 crises. It identifies a significant gap in the current literature: a lack of practical, actionable frameworks for healthcare resilience. To bridge this gap, the research introduces an innovative framework that blends theoretical resilience concepts with heuristic approaches. This framework, rooted in the principles of monitoring, anticipation, recognition, and learning, is designed to enhance the crisis management capabilities of healthcare systems. The methodology involves a comprehensive literature review, combined with heuristic methods, culminating in a framework that is both academically sound and practically applicable. This framework guides healthcare systems through various stages of crisis management, including data collection, situation analysis, risk anticipation, and response evaluation. It provides a holistic approach to enhancing resilience in healthcare settings. Overall, this paper makes a significant contribution to the field of healthcare system resilience, offering a strategic blueprint for improved crisis response and recovery. It marks an important advancement in aligning theoretical resilience concepts with practical implementation strategies, essential for tackling current and future healthcare challenges.