In one case, the Guardian newspaper reported that someone suffered permanent brain damage due to delayed relocation.
UnitedHealth is said to have secretly paid nursing homes to reduce hospital relocation. This is the latest accusation of a string of hardships facing the health insurance giant.
The alleged lawsuit, first reported by the Guardian Newspaper on Wednesday, was part of a series of cost-cutting tactics that saved the company millions, but sometimes put the health of its residents at risk, the publication said, citing the investigation.
The story, citing thousands of documents and direct accounts from more than 20 former employees of healthcare companies and nursing homes, says the insurance giant is sending its own medical team to nursing homes to drive cost-saving measures. As a result, patients who needed medical care urgently did not receive it. This includes one person with a permanent brain injury now after a delayed relocation.
The allegations add to the negative Rittany that has hurt United Health in the past few months, following reports of criminal and civil investigations into the company’s practices, including a massive cyberattack on the Change Healthcare Unit, Medicare fraud, and the company’s practices, including last week’s CEO’s sudden departure.
In response to the story, UnitedHealth said, “The U.S. Department of Justice has investigated these claims, interviewed witnesses and obtained thousands of documents demonstrating significant de facto inaccuracies in the claim.”
The company also said the DOJ “refused to pursue the issue.”
Wall Street responds
The stock stumbled all year round, losing more than 39% compared to the Dow’s 0.6% decline. As of midday ET (16:00 GMT), inventory has fallen by more than 3.6%.
“The news appears to be getting worse for UnitedHealth,” said Sahak Manuelian, managing director of global equity trading at Wedbush Securities.
HSBC downgraded its stocks to “reduce” its stocks from “hold” and reduced its price target by $270 low.
The brokerage said increased healthcare costs, potential fund cuts in drug pricing and its pharmacy benefits management units, OptumRx and Medicaid funding could disrupt the company’s recovery journey.