Shares in the UnitedHealth Group tumbled after it was reported the largest health insurer in the US is under investigation over possible criminal Medicare fraud.
The US Department of Justice has been investigating the health insurance giant since last summer, the Wall Street Journal reported, citing unnamed people familiar with the matter.
UnitedHealth’s shares dropped 16.5% during early trading in New York on Thursday, deepening a stark market rout. Its stock value has halved since the turn of the year.
Earlier this week, the vast healthcare firm announced its CEO, Andrew Witty, was stepping down for personal reasons as it suspended its full-year financial outlook due to higher-than-expected medical costs.
It has been a punishing period for UnitedHealth, starting in December when executive Brian Thompson was targeted and killed outside a New York City hotel.
While Medicare is a US government-run health insurance program for older and disabled people, Medicare Advantage is a program under which private health insurers contract with the Medicare program to provide health benefits.
UnitedHealth said: “We have not been notified by the Department of Justice of the supposed criminal investigation reported, without official attribution, in the Wall Street Journal today.”
“We stand by the integrity of our Medicare Advantage program,” the firm added.
The justice department did not immediately respond to a request for comment.
Earlier this year, the Journal reported that a civil fraud investigation had been launched into UnitedHealth’s Medicare practices, while US senator Chuck Grassley launched an inquiry into the company’s billing methods, demanding detailed compliance records.
For decades, the company has flourished by leveraging its dominance in insurance and growth in the Medicare market, the US government program that covers medical costs for elderly people.
The Associated Press and Reuters contributed reporting
