Report that UnitedHealth secretly paid nursing homes to cut hospital transfers sees stock plunge
UnitedHealth shares fell more than 4% on Wednesday after the UK's Guardian newspaper reported that the company made secret payments to nursing homes to reduce hospital transfers, adding to the woes of the healthcare conglomerate.
The alleged action, part of a series of cost-cutting tactics, has saved the company millions, but at times risked residents' health, the Guardian reported, citing an investigation.
The allegations add to the litany of negatives that have hurt UnitedHealth in the last several months, following a massive cyberattack at its Change Healthcare unit, reports of criminal and civil investigations into the company's practices, including one for Medicare fraud and the abrupt departure of CEO Andrew Witty last week.
Advertisement
UnitedHealth reportedly made secret payments to nursing homes to reduce hospital transfers, adding to the healthcare conglomerate's woes.
AP
Shares have stumbled all year, losing more than 39%, compared with a 0.6% decrease for the Dow.
UnitedHealth said in response that 'the U.S. Department of Justice investigated these allegations, interviewed witnesses, and obtained thousands of documents that demonstrated the significant factual inaccuracies in the allegations.'
The company also said in an emailed statement that the DOJ declined to pursue the matter after reviewing all the evidence during its multiyear investigation.
Advertisement
Reuters has not independently verified the article's allegations.
'The news is only seemingly getting worse for UnitedHealth,' said Sahak Manuelian, managing director, global equity trading at Wedbush.
'This is kind of a tough situation for investors to come in and have any kind of confidence in putting money to work, so we'll have to kind of wait and see how this plays itself out, unfortunately,' Manuelian said.
Advertisement
Stephen Hemsley returned as UnitedHealth CEO last week.
AP
Separately, HSBC downgraded the stock to 'reduce' from 'hold,' and cut the price target to a street-low of $270.
The brokerage said higher medical costs, pressure on drug pricing and its pharmacy benefit management unit, OptumRx, and a potential Medicaid funding cut can upset the company's recovery journey.
The company is now counting on the experience of Stephen Hemsley, who returned as CEO to steer it through the current crisis.
Advertisement
'We believe Hemsley has the experience and leadership attributes that the company needs to restore credibility and right the ship,' said James Harlow, senior vice president at Novare Capital Management.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hill
32 minutes ago
- The Hill
Sunday shows preview: Trump-Musk spat leaves admin reeling; ‘Big, beautiful bill' hits speed bump
President Trump and tech billionaire Elon Musk's feud spilled out in public on Thursday, with the world's richest man and the world's most powerful leader trading barbs that engulfed news cycles in Washington and abroad. Musk, a Trump ally, was vocal about his disappointment with Trump's 'Big, Beautiful Bill' currently sitting in the Senate. Musk, who spent millions during the 2024 presidential campaign to help elect Trump, called the massive piece of legislation a 'disgusting abomination.' Trump then weighed in on Thursday at the White House during German Chancellor Friedrich Merz's visit, saying, 'Elon and I had a great relationship. I don't know if we will anymore.' The spat intensified, with Musk floating the prospects of creating a third party, claiming that without his political contributions, Trump would not be victorious against ex-Vice President Harris in November and accusing the president of having ties to convicted sex offender Jeffrey Epstein. Trump threatened to cut off federal contracts awarded to Musk's companies. Later on Thursday, Musk signaled he might be open to brokering a truce with the commander-in-chief. After speaking with several news outlets Friday morning, Trump suggested he is ready to move on and indicated that he will not be speaking with Musk for a while. Trump told CNN Friday morning that he is 'not even thinking about Elon' and added that the SpaceX and Tesla CEO has 'got a problem. The poor guy's got a problem.' In the Senate, Trump's agenda bill, which passed the House chamber last month, has sparked concerns and criticism from GOP senators. The first group of GOP Sens., which consists of Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), Jerry Moran (R-Kan.) and Josh Hawley (R-Mo.), are arguing they could vote against the bill if it slashes Medicaid benefits. Others, including Sens. Rand Paul (R-Ky.) and Ron Johnson (R-Wis.) have previously said they would not back the legislation if it retains the current debt and spending levels. The GOP can have three defections total if all Democrats vote against the legislation. Sen. Johnson will be on CNN's 'State of the Union where he will likely discuss if any of his concerns regarding the 'Big, Beautiful Bill' have been addressed. As part of a push to root out waste, fraud and abuse within Medicare, Sen. Thom Tillis (R-N.C.) said this week that a bill sponsored by Sens. Bill Cassidy (R-La.) and Jeff Merkley (D-Ore.), that would crack down on Medicare Advantage overpayments known as 'upcoding,' could be inserted into Trump's massive legislation. Cassidy will be on NewsNation's 'The Hill Sunday,' where he will likely discuss the latest on the reconciliation package along with his recent visit to the White House. NewsNation's 'The Hill Sunday': Sen. Bill Cassidy (R-La.); Rep. Sarah Elfreth (D-Ma); U.S. Chamber of Commerce chief policy officer Neil Bradley. ABC's 'This Week': Ukrainian President Volodymyr Zelenskyy; House Speaker Mike Johnson (R-La.). NBC's 'Meet the Press': Sens. James Lankford (R-Okla.), and Cory Booker (D-N.J.). CNN's 'State of the Union': 'Sens. Bernie Sanders (I-Vt.), Ron Johnson (R-Wis.), and Markwayne Mullin (R-Okla.); Rep. Nicole Malliotakis (R-N.Y.). CBS' 'Face the Nation': National Economic Council Director Kevin Hassett; Sen. Amy Klobuchar (D-Minn.); Rep. Tony Gonzales (R-Texas); Save the Children U.S. President and CEO Janti Soeripto. 'Fox News Sunday': Office of Management and Budget Director Russ Vought; Sen. Rick Scott (R-Fla.); Rep. Michael McCaul (R-Texas). Fox News' 'Sunday Morning Futures': Secretary Of Interior Doug Burgum, Sen. Rand Paul (R-Ky.); House Ways And Means Committee Chairman Rep. Jason Smith (R-Mo.); Rep. Marjorie Taylor Greene (R-Ga.).
Forbes
an hour ago
- Forbes
AMA: Doctors And Patients Hurt By ‘Big Beautiful Bill'
The American Medical Association says legislation wending its way through the Republican-controlled ... More Congress would 'take us backward' as a country by cutting health benefits for poor and low-income Americans, the group's president said Friday, June 6. In this photo, the US Capitol in Washington, DC, US, on Tuesday, June 3, 2025. Photographer: Eric Lee/Bloomberg The American Medical Association says legislation wending its way through the Republican-controlled Congress would 'take us backward' as a country by cutting health benefits for poor and low-income Americans. Meeting for its annual policy-making House of Delegates this weekend in Chicago, the AMA is rallying physicians to thwart the legislation now before the U.S. Senate. Legislation known as the 'One Big Beautiful Bill Act' that narrowly passed the Republican-controlled U.S. House of Representatives two weeks ago 'would reduce federal Medicaid spending by $793 billion and that the Medicaid provisions would increase the number of uninsured people by 7.8 million,' a KFF analysis shows. 'We have to turn our anger into action,' AMA President Bruce A. Scott, M.D. said in a speech to AMA delegates Friday. 'I know our patience is being tested by this new administration and Congress.' The AMA said it has launched a 'grassroots campaign targeted at the Senate' in hopes of making changes to the legislation. The AMA is the nation's largest physician group with more than 200,000 members. 'The same House bill that brings us closer to finally tying future Medicare payments to the rising costs of running a practice, also takes us backwards by limiting access to care for millions of lower-income Americans,' Scott said. 'Medicare, Medicaid, and the Affordable Care Act are literal lifelines for children and families for whom subsidized health coverage is their only real option. We must do all we can to protect this safety net and continue to educate lawmakers on how best to target waste and fraud in the system without making it tougher for vulnerable populations to access care.' Scott, an otolaryngologist from Kentucky, said the Medicare physician payment system is broken and Congress hasn't addressed – as an increasing number of states have – prior authorization, the process of health insurers reviewing hospital admissions and medications. Prior authorization delays needed treatment and puts patient health in jeopardy, doctors say. 'I'm angry because the dysfunction in health care today goes hand in hand with years of dysfunction in Congress,' Scott added. 'I'm angry because physicians are bearing the brunt of a failed Medicare payment system. And while our pay has been cut by more than 33 percent in 25 years, we see hospitals and even health insurance companies receiving annual pay increases.' Meanwhile, the AMA says cuts to physician payments are pushing more physicians away from private practice and exacerbating the nation's doctor shortage. A recent analysis by AMN Healthcare shows only two in five physicians are now in doctor-owned private practices. And Americans in most U.S. cities face waits of at least one month before they can see certain specialists. 'Congress needs to know there is no 'care' in Medicare if there are no doctors," Scott said.
Yahoo
an hour ago
- Yahoo
Opinion: A smarter, fairer way to fund Medicaid for people like me
In 2004, I broke my neck and became a quadriplegic. I was 24 years old and completely paralyzed below my shoulders. Without Medicaid, I wouldn't have survived those early years — let alone gone on to earn a law degree. But I also wouldn't have stayed poor as long as I did. That's the problem with how Medicaid currently works for people with disabilities. To keep Medicaid, you often have to stay below poverty-level income and asset thresholds. Want to work? You risk losing your coverage. Want to save for a car? Not so fast. We need a Medicaid model that guarantees coverage for vulnerable populations and recognizes both the dignity of independence and the value of work. Here's my proposal: shift the primary responsibility for funding Medicaid to the states, while the federal government reimburses the states for Medicaid spending on: • Children in low-income families • Low-income elderly adults • People with disabilities ages 16-64 who are either progressing students (full reimbursement) or working (reimbursement up to the amount of their taxable income) The states would be required to provide Medicaid coverage for all people with disabilities regardless of income, assets, and work or student status, but both the states and federal government could require people with significant income to obtain private supplemental insurance — relieving states of some Medicaid costs. This plan does three essential things. First, it aligns financial incentives. Under current rules, the states have little reason to invest in helping disabled adults live meaningful lives, including pursuing education or working. Under this model, the more someone earns or pursues valuable education, the more their state receives in federal reimbursements. Helping disabled adults enter and remain in the workforce becomes not just morally right but also financially sound. Second, this plan unleashes human potential. According to the U.S. Bureau of Labor Statistics, the 2024 labor force participation rate for people with disabilities ages 16-64 was a tragically low 40%, compared to 78% for those without disabilities. The unemployment rate among people with disabilities was 8%, more than double the less than 4% rate of those without disabilities. These disparities aren't simply the result of individual limitations — they reflect a system that undermines work for people with disabilities, trapping them in poverty and limiting their potential. My plan removes that disincentive. Third, this plan brings fiscal discipline to Medicaid. In 2024, total Medicaid spending was over $900 billion, with about two-thirds covered by the federal government and one-third by the states, according to the National Association of State Budget Officers. We can target those funds better. According to the Kaiser Family Foundation's 2021 data, adults with disabilities ages 18-64 account for about one-third of Medicaid spending. My proposal would incentivize states to use Medicaid to help people with disabilities to pursue education, employment and independence, while encouraging state-led innovation to deliver those services more efficiently. States are better equipped to tailor care programs. They are 'laboratories of democracy.' With clearer authority and direct financial incentives rewarding their success, states will be free to pursue innovative care models: consumer-directed services, telehealth, supported employment or customized in-home care, whatever works best for the people of their state. Critically, this approach also elevates education as a path out of dependency. If a student with disabilities is making 'substantial academic progress' — a term that could be precisely defined in federal regulation — their state would qualify for full reimbursement of their Medicaid costs. This rewards long-term investment in human potential and acknowledges the added effort it takes to pursue education while managing a serious disability. For someone like me, this is more than policy — it's personal. Medicaid made my education possible. But the rules also penalized me for every financial step forward. That's not just inefficient — it's inhumane. We can do better. We can fund Medicaid in a way that values work, education and independence — while targeting federal dollars more precisely and empowering states to find better ways of delivering care. Let's stop trapping people with disabilities in poverty and start treating them as full participants in our economy. Let's build a Medicaid system that sees us not as burdens, but as investments.
