UnitedHealth Group Inc (NYSE: UNH) is slipping again this morning after the insurance company confirmed it’s under investigation by the Department of Justice over its Medicare billing practices.
The announcement follows months of speculation and media reports suggesting both civil and criminal probes into the company’s Medicare Advantage program.
It adds to a turbulent stretch for the world’s largest health insurance firm, which has faced executive turnover, rising medical costs, and a major cybersecurity breach in recent months.
Including today’s decline, UnitedHealth stock is down well over 50% versus its year-to-date high.
Why is UnitedHealth under investigation by the DOJ?
DOJ’s investigation centres on whether UnitedHealth inappropriately boosted payments from Medicare by inflating patient diagnoses.
Federal authorities have reportedly interviewed physicians to determine if they were encouraged to submit claims for conditions that may not have been clinically justified.
This marks the second time in 2025 that UNH’s Medicare Advantage business has drawn federal attention.
Earlier this year, a civil inquiry was launched into similar allegations.
Although a special master recently recommended dismissing a separate whistleblower case due to insufficient evidence, the latest developments suggest the DOJ is far from finished examining the company’s billing practices.
Note that UNH shares are currently trading a tad above their year-to-date low.
Significance of DOJ’s probe for UNH shares
For investors, the US Department of Justice’s probe adds another layer of uncertainty to an already challenging year for UnitedHealth Group Inc.
UNH stock has been under immense pressure due to rising medical costs and the abrupt departure of its former chief executive, Andrew Witty.
The Medicare Advantage segment, which generated $139 billion in revenue last year, is the company’s most lucrative division – making any threat to its integrity a rather serious concern.
Regulatory scrutiny could lead to fines, reputational damage, or even changes in reimbursement structures, all of which could significantly weigh on UNH’s future earnings.
Moreover, the NYSE-listed behemoth has suspended its guidance for the full year – indicating volatility may just remain a feature of UnitedHealth shares in the back half of 2025.
Is it worth buying UnitedHealth stock on the pullback?
While UnitedHealth stock just can’t seem to catch a break this year, it still isn’t out of reasons to warrant an investment.
For starters, given the multinational’s status as the largest private health insurer in the United States, its operational stability holds significant implications for the broader healthcare ecosystem.
As such, regulators may approach enforcement with a degree of pragmatism, aiming to uphold accountability without destabilising a key pillar of the system.
While the Department of Justice is actively investigating potential misconduct, the government also has a vested interest in ensuring that UnitedHealth can recover, maintain service continuity, and contribute to the long-term sustainability of Medicare Advantage and other public-private healthcare initiatives.
Put it together with a historically low valuation on UNH shares, and they may start to look a little too attractive to pass.
In fact, insiders have recently loaded up on the healthcare stock due to similar reasons, and Wall Street continues to rate it at “overweight” as well.
The post UnitedHealth confirms DOJ investigation: what it means for UNH shares appeared first on Invezz
