MINNETONKA, Minnesota: UnitedHealth shares took a sharp hit this week, after a report by the UK's Guardian alleged the healthcare giant made undisclosed payments to nursing homes to curb hospital transfers—raising fresh concerns about patient safety and corporate transparency.

According to the Guardian investigation, the company's secret arrangements aimed to reduce costs by discouraging transfers of elderly residents to hospitals. While the practice may have saved millions, it reportedly placed patient health at risk in some cases.

The controversy adds to mounting challenges for UnitedHealth, which is still dealing with the fallout from a major cyberattack on its Change Healthcare division, as well as criminal and civil investigations into its business practices. The company was also hit by the resignation of its CEO, Andrew Witty, as director, announced this week.

UnitedHealth responded by stating that the U.S. Department of Justice had conducted a thorough investigation into the allegations, reviewed documents, interviewed witnesses, and ultimately declined to pursue the matter—finding "significant factual inaccuracies."

Even so, investor confidence appears to be shaken. The company's stock has fallen more than 39 percent year-to-date, compared to a modest 0.6 percent dip in the Dow.

"The news is only seemingly getting worse for UnitedHealth," said Sahak Manuelian of Wedbush. "It's hard for investors to find confidence right now."

Compounding the pressure, HSBC downgraded UnitedHealth's stock from "hold" to "reduce," slashing its price target to a Street-low of US$270. The brokerage cited rising medical costs, drug pricing challenges, and looming cuts to Medicaid funding as key headwinds.

Now, back at the helm as CEO, Stephen Hemsley is being looked to for stability. "Hemsley has the experience and leadership attributes that the company needs to restore credibility and right the ship," said James Harlow of Novare Capital Management.