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Shares of UnitedHealth Group (NYSE:UNH) fell sharply in premarket trading Friday after The Wall Street Journal reported that the U.S. Department of Justice (DoJ) has launched a new civil fraud investigation into the company's business practices.
The probe focuses on how UnitedHealth adds questionable diagnoses to members' medical records, allegedly inflating payments for its Medicare Advantage plans. The investigation also involves the Office of Inspector General at the U.S. Department of Health and Human Services, according to sources cited in the report.
UnitedHealth declined to comment on the matter, as did spokespeople for the DoJ and the Health Department's Office of Inspector General.
This marks the latest in a series of legal challenges for the Minnetonka, Minnesota-based healthcare giant. In February 2024, the DoJ opened an antitrust investigation into UnitedHealth, and in November, it sued to block the company's $3.3 billion acquisition of home-health provider Amedisys (NASDAQ:AMED).
Stock Movement: UnitedHealth shares dropped 11.72% to $443.52, down $58.90 in premarket trading as of 8:20 a.m. ET.
This article first appeared on GuruFocus.