Shares of UnitedHealth Group dove early Thursday after the health care giant said that it was under a Department of Justice investigation, reports the AP. The company said that it has started complying with both criminal and civil requests from federal investigators. UnitedHealth "has a long record of responsible conduct and effective compliance," the company said in a Securities and Exchange Commission filing. Earlier this year, the Wall Street Journal said federal officials had launched a civil fraud investigation into how the company records diagnoses that lead to extra payments for its Medicare Advantage, or MA, plans. Those are privately run versions of the government's Medicare coverage program mostly for people ages 65 and over.
The company's UnitedHealthcare business covers more than 8 million people as the nation's largest provider of MA plans. The business has been under pressure in recent quarters due to rising care use and rate cuts. UnitedHealth Group Inc. said in February that it wasn't aware of the start of any new activity as the paper reported. The company said Thursday that it reached out to the Justice Department "after reviewing media reports about investigations into certain aspects of the company's participation in the Medicare program." UnitedHealth tells CNBC that it's undergoing a third-party review of its performance metrics, which it expects to complete at the end of the quarter.
UnitedHealth runs one of the nation's largest health insurance and pharmacy benefits management businesses. It also operates a growing Optum business that provides care and technology support. Company shares have mostly shed value since December, when UnitedHealthcare CEO Brian Thompson was fatally shot in midtown Manhattan on his way to the company's annual investor meeting. The stock price dropped 3%, or $9.63, to $283 shortly before markets opened Thursday.
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