Dow Dragged Lower By UnitedHealth After Government Sues Largest US Health Insurer
The Dow Jones "Industrial" Average is suffering one of its worst intraday declines in weeks as a result of a 3.6% drop in UnitedHealth shares, which are down 3.6% on the day after news that the DOJ joined a whistleblower lawsuit against the insurer filed by a former executive claiming the country's largest health insurer overcharged Medicare hundreds of millions of dollars.
The company denied the allegations, with UnitedHealth spokesman Matthew Burns saying in a statement that "we reject these more than five-year-old claims and will contest them vigorously."
Alleging insurance fraud, the lawsuit which was filed in 2011 and unsealed on Thursday, claims UnitedHealth Group overcharged Medicare by claiming the federal health insurance program's members nationwide were sicker than they were, according to the law firm Constantine Cannon LLP. Overnight, the DOJ also joined in allegations against WellMed Medical Management Inc, a Texas-based healthcare company UnitedHealth bought in 2011.
The lawsuit by whistleblower Benjamin Poehling, a former UnitedHealth executive, has been kept under seal in federal court in Los Angeles while the Justice Department investigated the claims for the past five years. Constantine Cannon posted the lawsuit online when it was unsealed on Thursday. No total damages were specified in the lawsuit.
UNH's drop is the biggest contributor to the DJIA's intraday slide, accounting for nearly 80% of the total point loss in the index.
The recently unsealed lawsuit is below