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Shares of UnitedHealth Group plunged more than 18% on Thursday following a report that the Justice Department is conducting a criminal investigation into the health-care giant over possible Medicare fraud.
The DOJ is focusing on the company’s Medicare Advantage business practices, but the exact nature of the potential criminal allegations is unclear, the Wall Street Journal reported late Wednesday, citing people familiar with the matter.
In a statement, UnitedHealth Group said the Justice Department has not notified it about the reported probe, and called the newspaper’s reporting “deeply irresponsible.”
The company also said “we stand by the integrity of our Medicare Advantage program.”
It marks the second time the insurer’s Medicare Advantage business has come under federal scrutiny this year. The Journal reported in February that the DOJ is carrying out a civil investigation into whether the company inflated diagnoses to trigger extra payments to its Medicare Advantage plans.
The reported investigation also follows the surprise exit of UnitedHealth Group CEO Andrew Witty, who will be replaced by the company’s former longtime chief executive, Stephen Hemsley.
Shares of UnitedHealth Group are down roughly 49% this year following a string of setbacks for the company.
UnitedHealth Group has lost over $300 billion of its $600 billion market cap in just one month, Jared Holz, Mizuho health care equity strategist, said in an email on Thursday. He said there is some risk that the company will be removed from the Dow Jones Industrial Average “at some point unless there is greater evidence of greater consistency.”
UnitedHealth Group also had a tumultuous last year, grappling with a historic cyberattack, higher-than-expected medical costs and the torrent of public blowback after the murder of UnitedHealthcare’s CEO Brian Thompson.
