UnitedHealth Group (NYSE:UNH) is facing an antitrust probe initiated by the U.S. Department of Justice (DOJ), according to the Wall Street Journal. Following the news, the stock of the health insurance giant declined 2.3% in yesterday’s regular trading session and another 1% in Wednesday’s pre-market trading.
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The investigation reportedly centers on various segments of UnitedHealth, including the UnitedHealthcare insurance unit and the Optum health services arm, which comprises physician groups and other assets. Optum Health offers various healthcare solutions like pharmacy benefit management and mental health support.
Interestingly, investigators are gathering the opinions of several healthcare industry representatives in the sectors where UNH has a presence. The DOJ is primarily concerned about the relationships between the company’s insurance unit and Optum, along with the potential impact of UNH’s doctor-group acquisitions on both competitors and consumers. Additionally, the regulator is probing UNH’s medicare billing issues.
Other Legal Troubles
UnitedHealth is currently facing a couple of other legal challenges. The DOJ is conducting an investigation of the company’s $3.3 billion deal to acquire Amedisys, a home healthcare services provider.
Furthermore, a California hospital system, Emanate Health, has filed a private antitrust lawsuit against the company. The lawsuit alleges that UNH attempted to exert pressure on the non-profit entity concerning its affiliated physician groups and gain control over primary care doctors in the region.
Is UNH a Good Buy Right Now?
Overall, UNH stock has a Strong Buy consensus rating, based on 15 Buys and one Sell recommendation. The average stock price target of $599.57 implies 16.8% upside potential. Shares of the company have gained 9.5% over the past year.
