Federal Investigators Target Healthcare Giant
UnitedHealth Group (NYSE: UNH) shares plummeted 7% in premarket trading Friday following revelations of dual Department of Justice investigations into its Medicare Advantage operations and recent acquisition attempts. This marks the second major antitrust action against the healthcare conglomerate in four months.
The Twin Legal Challenges
Probe #1: The DOJ’s antitrust division is scrutinizing potential Medicare Advantage overbilling through alleged manipulation of patient risk scores. This follows longstanding concerns that insurers exaggerate patient diagnoses to receive higher government payments.
Probe #2: Federal regulators continue fighting UnitedHealth’s proposed $3.3 billion acquisition of home health provider Change Healthcare, filed in November 2024. The DOJ argues this deal would create an anticompetitive “data monopoly” in healthcare services.
Market Impact and Analyst Reactions
| Metric | Impact |
|---|---|
| Stock Price | 7% premarket drop (Feb 21) |
| Market Cap | $15B+ loss overnight |
| Investor Sentiment | 52% increase in put options |
Wall Street analysts remain divided:
- “This could expose $6B+ in Medicare overpayments” – Bernstein Research
- “Regulatory risk now outweighs growth potential” – Morgan Stanley
Historical Context
The current probes follow:
- 2024 blocked acquisition of Amedisys home health services
- 2023 $15M settlement for mental health coverage violations
- 2021 $100M opioid prescription settlement
