UnitedHealth shares plummeted after a bombshell report revealed alleged secret payments to nursing homes that may have compromised patient care and saved the healthcare giant millions.
At a Glance
- UnitedHealth Group allegedly paid nursing homes bonuses to reduce hospital transfers for residents, potentially risking patient health
- The company’s stock dropped over 8% initially before ending down 3% at $311.59 following The Guardian’s investigative report
- UnitedHealth claims the Department of Justice investigated and found “significant factual inaccuracies” in the allegations
- Whistleblowers and internal documents reveal cases where residents allegedly did not receive necessary hospital care
- The controversy adds to UnitedHealth’s troubles, including a separate DOJ criminal investigation into Medicare fraud allegations
Secret Payment Scheme Allegations Surface
According to an investigative report by The Guardian, UnitedHealth Group allegedly established secret payment arrangements with nursing homes to reduce hospital transfers for residents covered by the insurer’s plans. The program allegedly involved UnitedHealth’s medical teams working in nursing homes to cut care expenses through financial incentives that could amount to hundreds of thousands of dollars annually for participating facilities. The revelation sent UnitedHealth shares tumbling, initially falling more than 8% before paring losses to end the day down 3% at $311.59.
These alleged cost-cutting measures reportedly saved UnitedHealth millions of dollars but potentially put nursing home residents’ health at risk. Whistleblowers and internal documents suggest that under this arrangement, some residents did not receive necessary hospital care, resulting in harm. A specific case mentioned in reports involved a man who allegedly suffered permanent brain damage due to a delayed transfer for a suspected stroke. The company has strongly denied preventing hospital transfers and claims its program actually improves health outcomes.
UnitedHealth’s Response and DOJ Investigation
UnitedHealth has pushed back forcefully against the allegations, claiming they are “verifiably false.” The healthcare giant stated that the U.S. Department of Justice had already investigated these claims, interviewed witnesses, and obtained thousands of documents that demonstrated “significant factual inaccuracies” in the allegations. According to UnitedHealth, the DOJ declined to pursue the matter further after conducting a multi-year investigation into the claims.
However, whistleblower Maxwell Ollivant, a former UnitedHealth nurse practitioner, has filed a congressional declaration urging accountability for the company’s practices. Ollivant and other current and former employees have raised concerns about UnitedHealth’s influence on nursing home staff, claiming they were pressured to follow the company’s protocols, potentially affecting patient care decisions. Critics suggest the company’s financial incentives created conflicts of interest in medical decision-making.
Mounting Challenges for the Healthcare Giant
This controversy adds to a growing list of challenges facing UnitedHealth. The company is already dealing with a separate Wall Street Journal report of a Department of Justice criminal investigation into potential Medicare fraud. Additionally, UnitedHealth has been grappling with the aftermath of a major cyberattack that affected approximately 190 million people, an unexpected surge in medical costs impacting financial performance, and pressure from drug pricing regulations.
“How many of those people were further harmed because they never received the care that they needed?”, said Ollivant, the former UnitedHealth nurse practitioner turned whistleblower
The company has also experienced significant leadership changes, with CEO Andrew Witty’s abrupt departure and the appointment of former CEO Stephen Hemsley to lead the organization through the crisis. These developments, coupled with the withdrawal of UnitedHealth’s 2025 financial forecast, have severely impacted investor confidence. HSBC recently downgraded the stock to “reduce” from “hold” and set a price target of $270, reflecting growing concerns about the company’s future prospects amid multiple ongoing investigations.
