This civil probe is separate from a Justice Department antitrust probe, sources told the Journal. The department has also sued to stop UnitedHealth's acquisition of home health firm Amedisys, citing antitrust concerns. Amedisys shares are down about 1% in trading on Friday.
UnitedHealth said in a statement that the Journal has reported "misinformation" about its Medicare Advantage program. The company noted that the government regularly evaluates plans tied to the program.
"We are not aware of the 'launch' of any 'new' activity as reported by the Journal. We are aware, however, that the Journal has engaged in a year-long campaign to defend a legacy system that rewards volume over keeping patients healthy and addressing their underlying conditions," UnitedHealth said in the statement. "Any suggestion that our practices are fraudulent is outrageous and false."
The DOJ did not respond immediately to CNBC's requests for comment.
This investigation is the latest driver of attention on the blue-chip company, which is the largest private health insurer in the U.S. A gunman killed Brian Thompson, then-CEO of UnitedHealth's insurance unit, in New York City late last year when the executive was in town for the company's investor day. The shooting unleashed a flood of online complaints about U.S. healthcare.
With Friday's declines, the stock is down more than 10% on the year. That builds on the loss of nearly 4% recorded in 2024.
Mizuho analyst Ann Hynes said that pullback offers investors a chance to buy the dip on the stock, which she said is still an "attractive" investment over the long term. Hynes is in the majority on Wall Street with a buy-equivalent rating, per LSEG.
"We note that DOJ investigations are never good for a company, but we do believe there will be an incremental negative EPS impact for UNH as the company is already absorbing the impact through previous published regulatory changes," Hynes wrote to clients, using the acronym for earnings per share. "We expect the DoJ probe to take years and will likely result in a monetary fine. We would be buyers of UNH on the weakness."
