UnitedHealth (UNH) is facing intense scrutiny from two U.S. senators, Ron Wyden and Elizabeth Warren, concerning its cost-cutting measures in nursing homes. They have launched a formal investigation into the company after reports claimed that UNH may be encouraging nursing homes to avoid sending sick residents to the hospital.
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Allegations and Concerns
The probe claims that UnitedHealth paid nursing homes bonuses for reducing hospital transfers for residents enrolled in its insurance plans. Although this can sometimes help avoid unnecessary hospital visits, the senators worry the real motive was profit, leading to delays in critical care.
In a letter to UnitedHealth, Wyden and Warren expressed alarm, stating that the company’s “incentive schemes may drive delays in medically necessary hospitalizations and emergency room visits” and could result in “permanent harm” to residents.
They are also concerned about reports that UNH’s Optum subsidiary may have pushed residents to sign do-not-resuscitate or do-not-intubate orders, which senators think could be a tactic to cut hospital costs.
To investigate these claims, the senators have asked UnitedHealth to share documents about its nursing home incentive programs, especially those tied to hospital visits. They also want data on the company’s marketing and how its nursing home operations are monitored by federal and state regulators. The company has until September 8 to respond.
Legal and Financial Troubles Deepen
This latest probe adds to the growing list of problems UNH is facing. The Department of Justice is already investigating UnitedHealth for potential billing fraud in its Medicare Advantage plans. On top of that, the company faces criticism for allegedly using algorithms to limit patient care and for engaging in potential anti-competitive practices.
UnitedHealth is also struggling financially. The company recently pulled back its profit forecast for 2025 and then issued a lower one after admitting that it had underestimated its medical costs.
With multiple investigations underway and investor confidence shaken, people will keep a close eye on what UnitedHealth does next.
Is UNH a Good Buy Right Now?
Turning to Wall Street, UNH stock has a Moderate Buy consensus rating based on 18 Buys, three Holds, and two Sells assigned in the last three months. At $313.68, the average UnitedHealth stock price target implies a 25.36% upside potential.
