United Health Group, which goes by the ticker UNH, one of the largest corporations in the US, is down 50% since Nov, and 15% today.
The Wall Street Journal published allegations of Medicare fraud last year
Then the Department of Justice (DOJ), launched an investigation into their Medicare billing practices.
Then, United Health Group slashed their Medicare guidance in their last earnings. Now, the CEO abruptly resigns and they completely suspend their financial guidance.
The allegations are that United was inappropriately adding additional diagnoses to patient records of illnesses/conditions that patients didn’t actually have, to make the patients look sicker than they actually are.
Medicare pays insurers based on how sick the patients they’re servicing are; sicker patients = bigger payout.
Shame on United and also just a horrifically designed government system as well that promotes abuse.
At the same time, the stock price comes to within $1-3 of its 200 monthly moving average. Reputational risk can cause more selling but long-term stock will be fine, if fraud I’m sure a deal gets reached Sure it’s high risk but it’s at same level as low from GFC in 2009.