The US authorities are once again investigating the largest private health insurer in the $UNH (+1,08Â %) in the USA. The suspicion: manipulative billing methods for Medicare. The share price plummets - and with it the trust in an entire system.
One percent sounds harmless at first. But for a company like UnitedHealth, such a drop in share price is more than just a side note - it is an alarm signal. Once again, the American insurance giant is under pressure.
The reason:
The Department of Justice has expanded its investigation into the Dow Jones company. The suspicions are serious - and not new.
Doubts about the diagnosis
According to Wall Street Journalwhich cites informed sources, the US Department of Justice's division specializing in healthcare fraud is investigating UnitedHealth's billing practices.
Specifically:
The way doctors within the group are used to make diagnoses - diagnoses that are not only medically relevant, but apparently also financially useful.
Specifically, it is about so-called "upcoded" diagnoses within the Medicare system. This is the state-subsidized healthcare programme for older Americans.
The more serious the illness, the higher the government's payments to insurers - an incentive that the business model of major players such as UnitedHealth is apparently all too happy to exploit.
Back in May, the WSJ reported that investigations into this very issue were underway - now it is clear that the investigations go back at least as far as the summer of 2024 and are apparently expanding.
A sector under power
The uncertainty is not only affecting UnitedHealth. Competitors such as Centene and Molina Healthcare have also had to contend with negative news in recent days.
Centene even withdrew its own forecast for the year - a dramatic step for a company of this size. And Molina disappointed with its preliminary quarterly figures. Investors are increasingly fleeing a sector that has long been considered reliable - at least financially.
But the nervousness is not unjustified. US health insurers are operating in a field of regulatory tension: on the one hand, there are public programs worth billions, such as Medicare Advantage, and on the other, growing mistrust on the part of the supervisory authorities - not least due to previous scandals and aggressive business models.
The goal: growth at any price, often on the back of a non-transparent billing system.
The political component
The investigations come at a sensitive time. The election campaign is about to begin in the USA - and the healthcare system is traditionally a key issue. For Democrats and Republicans alike, Medicare is a plaything of political symbolism.
The authorities react all the more sensitively when doubts are raised about the integrity of large providers. Although there are currently no formal charges against UnitedHealth, the ongoing investigations alone could prove costly for the company. Not only financially, but also reputationally.
Share price under pressure, forecast uncertain
Investors are correspondingly cautious. The share price is only just above the psychologically important USD 300 mark - a level that has recently been tested several times. The chart looks battered and analysts are talking about a "broken trend". Although UnitedHealth is operationally profitable, confidence in the sustainable integrity of the business is crumbling.
Truly reliable statements will probably only be made with the upcoming quarterly publication. The company will then also adjust its forecast for the current financial year. Whether this will be enough to dispel doubts is questionable. Especially as the market is increasingly recognizing that the problem is not just UnitedHealth - it is systemic.
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