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Someone might want to check UnitedHealth’s (UNH-0.13%) vitals. The U.S.’s largest health insurer is taking hits from all sides — its stock is sliding, the Department of Justice is circling, and an investigation just accused it of secretly paying nursing homes to keep patients from going to the hospital.
A report from The Guardian alleges that UnitedHealth deployed in-house medical teams to around 2,000 nursing homes and offered cash incentives to limit hospital transfers to cut costs under its Medicare Advantage program. Internal records viewed by the newspaper and whistleblower accounts suggest that treatment for some residents in urgent need of hospital care was delayed or even denied, resulting in long-term damage.
Bonuses were reportedly tied to hospitalization rates, with one key metric labeled “admits per thousand,” and high rates meant no financial rewards. Nursing home staff were allegedly encouraged to change patients’ code status to “do not resuscitate” and use access to health records to help target potential enrollees.
UnitedHealth’s stock was down 5.2% in mid-morning trading Wednesday.
In a statement provided to Quartz, UnitedHealth said that as part of a multiyear investigation, the Department of Justice investigated these claims, interviewed witnesses, reviewed thousands of documents, and ultimately “declined to pursue the matter” after finding “significant factual inaccuracies.”
Regardless, it’s been a rough year for UnitedHealth. Its stock slumped more than 13% last week after The Wall Street Journal reported that the Department of Justice is conducting a criminal investigation into the company’s Medicare billing practices.
And the company’s board recently announced a leadership shakeup, with former CEO and current board chair Stephen Hemsley stepping back in to replace Andrew Witty. Meanwhile, UnitedHealth suspended its 2025 financial guidance, blaming unexpectedly high medical costs from new Medicare Advantage enrollees.
The company’s stock is down 33% since mid-April, and investors are losing patience.
According to Barron’s, HSBC (HSBC-2.97%) analyst Sidarth Sahoo downgraded the stock from “Hold” to “Reduce” and slashed his price target by 45%, warning that UnitedHealth’s recovery “could be delayed” — giving the new CEO what Sahoo called a “kitchen sinking opportunity.”