Core Viewpoint - UnitedHealth Group, Inc. is facing increased legal challenges as shareholders file multiple lawsuits related to a federal investigation into the company's Medicare billing practices, which were highlighted in a Wall Street Journal report [1][3]. Summary by Sections Legal Actions - Steve Silverman, a long-time shareholder, has filed a derivative lawsuit in federal court, claiming that UnitedHealth's leadership has harmed the company through questionable billing practices [2]. - The lawsuit accuses CEO Stephen Hemsley, former CEO Andrew Witty, and board members of engaging in practices that led to inflated reimbursements, significantly impacting the company's financial results and stock price [3][4]. - Other shareholders have also filed lawsuits, with one alleging that Hemsley and Witty profited from stock sales before the DOJ investigation became public [5][6]. Financial Impact - The lawsuits focus on the profitability of UnitedHealth's Medicare business, which has drawn negative attention and affected its stock price [6]. - Allegations include that the company repurchased $7.3 billion in stock at inflated prices while executives profited from share sales during the undisclosed DOJ investigation [9]. Company Challenges - UnitedHealth is currently navigating a series of challenges, including ongoing lawsuits, a DOJ investigation, regulatory changes, and leadership changes following the resignation of CEO Andrew Witty [7][10]. - The company's stock has seen a significant decline, falling over 40% year-to-date, with shares trading at $302.10 at the time of the report [11].

Core Viewpoint - UnitedHealth Group is undergoing significant leadership changes and strategic reassessments following a substantial decline in stock performance and regulatory scrutiny, particularly in its Medicare practices [1][2][3]. Group 1: Leadership Changes - UnitedHealth Group re-elected all current directors and appointed Stephen Hemsley as the new CEO after Andrew Witty's resignation [1]. - Hemsley acknowledged the company's recent performance issues and committed to a comprehensive review of controversial practices [4]. Group 2: Financial Performance - The company authorized a cash dividend increase to $2.21 per share, up from $2.10, to be paid on June 24 [1]. - Year-to-date, UnitedHealth's stock has dropped nearly 40%, primarily due to disappointing fourth-quarter 2024 earnings [2]. Group 3: Medicare Strategy and Regulatory Scrutiny - Under Witty, UnitedHealth's aggressive growth strategy in Medicare Advantage faced increased regulatory scrutiny and rising costs [3]. - The company plans to enlist independent experts to review its Medicare billing practices following criticism from a Wall Street Journal investigation [3]. - Hemsley indicated that the company would factor recent results into its 2025 Medicare bids and adopt a "fresh perspective" on criticized issues [5]. Group 4: Impact of Regulatory Changes - Changes announced by the Medicare agency in 2023 are expected to significantly reduce reimbursements for nearly 900,000 patients, impacting UnitedHealth's financial outlook [6][7]. - Despite these challenges, UnitedHealth continues to pursue growth in Medicare, particularly in high-risk patient segments, while competitors have scaled back [7]. Group 5: Internal Review and Future Directions - Hemsley stated that the company would also review its pharmacy services and managed care policies, including prior authorization processes that have faced criticism [8].