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Shares of U.S. health insurer UnitedHealth dropped Friday following news that the Justice Department has joined a lawsuit filed by a former executive. The lawsuit accuses the company of overcharging Medicare by hundreds of millions of dollars.
UnitedHealth stock, a component of the Dow Jones Industrial Index, was down more than 4 percent in afternoon trading. Shares were last trading hands at $156.62.
Shares of several other insurers also fell. They include Aetna, Humana, and WellCare, which whistle blower Benjamin Poehling, the former UNH executive, has also sued. (Shares of Aetna were later halted pending news.)
The Justice Department has not joined the allegations that Poehling has made against those three companies.
Poehling alleges that UnitedHealth gamed an insurance program known as risk adjustment by claiming members of Medicare managed care plans were treated for conditions that they either did not actually have, or which they were not treated for.
His suit in Los Angeles federal court claims that Medicare, the federally run health-coverage system for primarily senior citizens, has paid out hundreds of millions of dollars to UnitedHealth and its affiliates for false claims.
UnitedHealth has denied Poehling's allegations.