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UnitedHealth Group (NYSE:UNH) dropped about 6% in Thursday's pre-market trading following a report that the U.S. Department of Justice is investigating the company over possible Medicare fraud.
The probe focuses on UnitedHealth's Medicare Advantage operations, according to The Wall Street Journal. The DOJ's healthcare-fraud unit, which handles cases involving alleged improper billing or kickbacks, is leading the investigation.
This marks the second time this year the insurer's Medicare Advantage business has come under federal scrutiny. In February, the DOJ reportedly examined whether the company inflated diagnoses to secure higher payments from Medicare.
The latest development follows a surprise leadership change earlier this week, with UnitedHealth replacing its CEO unexpectedly. The shake-up added to recent turbulence after shareholders filed a lawsuit this month, accusing the company of withholding the financial fallout tied to backlash from the reported killing of former UnitedHealthcare CEO Brian Thompson.
UnitedHealth has not publicly responded to the DOJ report as of early Thursday
This article first appeared on GuruFocus.