UnitedHealth Shares Drop as DOJ Broadens Criminal Probe
Investigation expands to include Optum Rx and physician payments, intensifying scrutiny on the healthcare giant.
UnitedHealth Group Inc. shares fell sharply after reports emerged that the U.S. Department of Justice has broadened its criminal investigation into the company, moving beyond its Medicare Advantage business to scrutinize its pharmacy and physician payment practices.
The healthcare giant saw its stock price drop by 3.5% during intra-day trading on elevated volume as investors reacted to the news, which signals a significant escalation of federal scrutiny. According to a Bloomberg Law report, the DOJ's criminal division is now examining business practices at Optum Rx, UnitedHealth's influential pharmacy benefit manager, as well as the company's physician reimbursement methods.
This development widens the scope of a previously known federal probe that was understood to be focused on the company's Medicare Advantage plans. The expansion suggests that investigators have concerns that extend into the core operations of UnitedHealth's sprawling healthcare empire. Optum, a major driver of the company's growth, has itself been the subject of increasing regulatory attention regarding its market power and business practices.
The investigation is being led by the Justice Department's criminal division, according to people familiar with the matter cited in the reports. The inquiry into physician payments delves into the complex financial relationships and compensation structures within UnitedHealth's vast network of medical providers.
The broadened probe introduces a new layer of legal and financial risk for UnitedHealth, one of the largest and most influential players in the American healthcare industry. The uncertainty surrounding a wide-ranging federal criminal investigation could weigh on the company's stock and reputation as it navigates the complex legal proceedings. The outcome could have significant implications not only for UnitedHealth but for the broader healthcare sector, which is facing increasing pressure from regulators over issues of competition, pricing, and billing practices.