UnitedHealth (UNH) stock was down Friday on a report from The Wall Street Journal that the health insurance company faces a Department of Justice (DOJ) probe over how it bills Medicare. The issue is that UnitedHealth is pulling in large sums from Medicare plans, including from physician groups owned by the insurance company.
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Reports claim that the DOJ investigation is focused on these extravagant charges. This follows reports that UnitedHealth is more aggressive with its diagnosis incentives than other health insurance companies. This includes encouraging doctors to diagnose patients with rare and benign conditions for higher Medicare payments while not always treating them.
UnitedHealth has also recently faced criticism over its patient payment approval system, including comments from Bill Ackman after a surgeon was called out of active surgery to answer a call concerning patient pay. The company has also faced extra scrutiny from traders and the general public following the assassination of UnitedHealthcare CEO Brian Thompson late last year.
UNH Stock Movement Today
The controversies surrounding UnitedHealth aren’t doing UNH stock any favors. This has the shares down 11.46% in pre-market trading this morning, following a 1.69% drop yesterday. The stock is also down slightly year-to-date and 3.08% over the past 52 weeks.
Today’s reports have likely triggered a selloff of UNH stock as anxious investors exit the controversial healthcare company. This has 1.3 million shares traded as of this writing, compared to a three-month daily average of 4.4 million units.
Is UNH Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for UnitedHealth is Strong Buy based on 20 Buy ratings over the last three months. With that comes an average price target of $644.00 with a high forecast of $700.00 and a low forecast of $595. This represents a potential 28.18% upside for UNH stock.
