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UnitedHealth Group (NYSE:UNH) shares slid more than 6% on Wednesday morning after a report alleged the insurer made undisclosed payments to nursing homes to curb resident hospital transfers.
The Guardian investigation claimed these payments saved UnitedHealth millions but at times jeopardized patient care. UnitedHealth countered that the U.S. Department of Justice reviewed the allegations, interviewed witnesses and examined thousands of documents before concluding the report contained significant factual inaccuracies and declining to open a formal probe.
Earlier this month, the Wall Street Journal revealed the DOJ had launched a criminal inquiry into potential Medicare fraud at UnitedHealth. Those developments followed CEO Andrew Witty's sudden departure and the withdrawal of the company's 2025 forecast last week.
Separately, HSBC downgraded the equity to reduce from hold and cut its price target to a street-low $270. Analysts at HSBC warned that the new CEO inherits a clean(er) slate but faces headwinds from higher medical costs, pressure on drug pricing and potential Medicaid funding cuts.
UnitedHealth has also weathered a major cyberattack at its tech unit, an ICE contract probe and rising medical expenses over the past year, heightening investor uncertainty about the company's near-term outlook.
This article first appeared on GuruFocus.