Leadership changes within insurance giant UnitedHealth Group (NYSE: UHG) and its subsidiary Optum have rattled the company from the inside out, with UHG CEO Andrew Witty abruptly resigning on Tuesday, replaced with Chairman Stephen Hemsley who was CEO for UnitedHealth prior to stepping down in 2017.

The news comes on the heels of new leadership at Optum, with Patrick Conway taking the CEO role as of May 6, formerly holding a senior leadership role at Optum Rx; the previous Optum CEO Heather Cianfrocco took on a new role as executive vice president of governance, compliance and information security at UnitedHealth, according to multiple reports including Reuters.

Witty resigned amid surging medical costs and shares plunging by more than 15%, reaching a four-year low, according to reports from Reuters and other outlets; UnitedHealth suspended its annual forecast as well.

Coupled with these issues was a lawsuit against UnitedHealth in February over its wrongful denials of post-acute care under Medicare Advantage plans, including nursing home services. UnitedHealth’s use of AI tool nH Predict led to arbitrary coverage denials without consideration of the patients’ health status or the involvement of a physician, according to the lawsuit.

With the latest court ruling, Medicare Advantage enrollees and their families can now seek documents from UnitedHealth especially if they pertain to the use of AI tools.

“The recent headwinds within the large traditional Medicare Advantage market has been well documented and has impacted these organization’s involvement in the I-SNP and IE-SNP market,” said Hank Watson, chief development officer for American Health Plans, a competitor of Optum’s which offers provider-owned I-SNPs.

UnitedHealth in 2024 was also dealing with the aftermath of a cyberattack as part of its tech unit and backlash from the murder of its insurance unit head, Brian Thompson, in December.

Luigi Mangione, the 26-year-old suspect in the killing of UnitedHealthcare CEO Brian Thompson, has family connections to the skilled nursing and senior living sector. Mangione’s grandfather – Nick Mangione Sr. – founded Lorien Health Services.

Upon assuming leadership, Hemsley expressed gratification for Witty’s leadership, “especially during some of the most challenging times any company has ever faced,” referring to the controversies mentioned above.

“The Board and I have greatly valued his leadership and compassion as chief executive and as a director and wish him and his family the best,” added Hemsley.

Hemsley said he looks to return UnitedHealth to its long-term growth objective of 13% to 16%.

“Steve Hemsley brings a combination of strategic vision and deep operational focus that are highly valuable to our company,” Michele Hooper, lead independent director of UnitedHealth Group, said in a statement.