Shares of UnitedHealth Group (UNH -11.14%) are falling on Thursday. The company's stock has plummeted 15% as of 11:33 a.m. ET but lost as much as 19.2% earlier in the day. The collapse comes as the S&P 500 gained 0.1% and the Nasdaq Composite fell 0.4%.
The troubled health insurance giant is facing reports of a Department of Justice (DOJ) investigation into possible Medicare fraud.
UnitedHealth is facing a DOJ probe
The Wall Street Journal reported late Wednesday that the DOJ's healthcare fraud unit is conducting a criminal investigation into the company for possible Medicare fraud. According to the report, the investigation has been ongoing since at least last summer.
UnitedHealth was apparently unaware the investigation had been launched, but after the news broke insists that it stands "by the integrity of [its] Medicare Advantage program."
The latest threat
UnitedHealth is already under investigation by the DOJ in a civil fraud case surrounding its Medicare billing practices. The revelation of another investigation comes just days after its CEO, Andrew Witty, left the company abruptly for "personal reasons."
Image source: Getty Images.
The company is also facing rising health costs that are pressuring its margins and was forced to cut full-year guidance in its last quarterly earnings report.
All of this has shaken investor confidence in the healthcare giant, and its shares have plummeted 50% in just 23 trading days, marking the most severe drop for an S&P 100 company since Netflix fell 54% in May 2022, according to Dow Jones Market Data.
There are just too many issues facing UnitedHealth at the moment and this once seemingly stable investment looks far from it at the moment. I would stay away from UnitedHealth stock.
