UnitedHealth pullback ‘overdone’ after report that ‘misses mark,’ says JPMorgan

JPMorgan notes that The Guardian published the first in what appears to be a series of pieces on UnitedHealth (UNH), focusing on what the firm believes are “relatively normal-course” value-based contracts and several incidents around UnitedHealth’s review of hospitalizations. The firm is “not surprised” that UnitedHealth focuses on Admissions Per 1,000, a common way to evaluate a facility’s ability to proactively manage care and avoid costly hospitalizations, but the firm does not think that structures that reward low APK facilities are drivers of broad-based inappropriate behavior. Much of what has been discussed in the article has been previously investigated according to the company, with the DOJ declining to charge the company. While the firm appreciates that investors are still digesting the significant changes in the last six weeks, the firm believes the reporting on nursing home payments and hospitalizations “misses the mark” and views today’s movement as “overdone,” says the analyst, who keeps an Overweight rating on the shares.