Core Insights - UnitedHealth Group Incorporated (UNH) is under investigation by the U.S. Department of Justice regarding its Medicare Advantage billing practices, specifically for potentially inflating diagnoses to receive higher payments from Medicare [1][3][8] - The investigation focuses on the HouseCalls program, where nurses visited patients at home and allegedly recorded diagnoses that led to additional payments, raising concerns about healthcare fraud [2][3] - As the largest player in the Medicare Advantage market, a criminal probe could have significant implications for UnitedHealth, including billions in federal payments and its overall business model [3][4] Company Performance - UnitedHealth has denied any wrongdoing, asserting that its practices comply with federal guidelines, but faces challenges amid rising medical costs and has withdrawn its 2025 earnings guidance [4][8] - The stock of UnitedHealth has declined by 40.2% year-to-date, compared to a 31.1% decline in the industry [7] - The Zacks Consensus Estimate for UnitedHealth's 2025 earnings is projected at $21.85 per share, indicating a 21% decrease from the previous year [11] Industry Context - Other insurers, such as Molina Healthcare and Centene Corporation, are also struggling with rising medical costs, leading to reduced earnings guidance and financial outlooks [5][6] - Molina Healthcare has adjusted its 2025 earnings per share forecast down to between $21.50 and $22.50, while Centene Corporation has pulled its financial outlook due to higher medical costs [5][6]

Core Viewpoint - UnitedHealth Group is facing significant scrutiny and legal challenges following allegations of undisclosed payments to nursing homes aimed at reducing hospital transfers, which has led to concerns about patient care and corporate practices [1][3][4]. Group 1: Allegations and Legal Issues - Allegations have emerged that UnitedHealth incentivized nursing facilities to limit hospitalizations among Medicare Advantage enrollees, potentially compromising patient care [3][4]. - The company is currently involved in a securities fraud class action lawsuit, with claims that it improperly denied health coverage to enhance profits, leading to regulatory scrutiny [5][6]. - A significant drop in UnitedHealth's stock price occurred after the company reduced its financial guidance for 2025, attributing it to unexpected increases in care activity within its Medicare Advantage business [6][7]. Group 2: Management and Regulatory Scrutiny - The abrupt departure of CEO Andrew Witty on May 13, 2025, has added to the turmoil within the company, resulting in a more than 10% decline in share price on that day [7]. - Federal authorities are investigating whether UnitedHealth engaged in "upcoding," a practice that could inflate Medicare payments by misrepresenting patient diagnoses [8]. Group 3: Investigations and Responses - Hagens Berman, a law firm, is investigating the securities fraud claims against UnitedHealth and is encouraging investors who have suffered losses to come forward [2][9]. - The firm has raised concerns about the implications of the recent allegations on UnitedHealth's commitment to patient care and transparency [10].