A report from The Guardian alleges that UnitedHealth deployed in-house medical teams to around 2,000 nursing homes and offered cash incentives to limit hospital transfers to cut costs under its Medicare Advantage program.
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Bonuses were reportedly tied to hospitalization rates, with one key metric labeled “admits per thousand,” and high rates meant no financial rewards. Nursing home staff were allegedly encouraged to change patients’ code status to “do not resuscitate” and use access to health records to help target potential enrollees.
UnitedHealth’s stock was down 5.2% in mid-morning trading Wednesday.
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Regardless, it’s been a rough year for UnitedHealth. Its stock slumped more than 13% last week after The Wall Street Journal reported that the Department of Justice is conducting a criminal investigation into the company’s Medicare billing practices.
And the company’s board recently announced a leadership shakeup, with former CEO and current board chair Stephen Hemsley stepping back in to replace Andrew Witty. Meanwhile, UnitedHealth suspended its 2025 financial guidance, blaming unexpectedly high medical costs from new Medicare Advantage enrollees.
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According to Barron’s, HSBC (HSBC-2.97%) analyst Sidarth Sahoo downgraded the stock from “Hold” to “Reduce” and slashed his price target by 45%, warning that UnitedHealth’s recovery “could be delayed” — giving the new CEO what Sahoo called a “kitchen sinking opportunity.”
* Original Article:
https://qz.com/unitedhealth-medicare-insurance-health-care-stock-1851781705