Amedisys, Inc. File Lawsuit Over Alleged Securities Fraud
July 2, 2012 (Update) -- Judge Brian Jackson dismissed a consolidated Amedisys Inc. class action finding the plaintiffs evidence to be inadequate.
June 10, 2010 -- Another investor in Amedisys filed a lawsuit in the United States District Court for the Middle District of Louisiana on behalf of purchasers of Amedisys, Inc. (NASDAQ: AMED) securities during the period of April 30, 2008 and June 30, 2010, over alleged Securities Laws Violations by Amedisys Inc. The first lawsuit filed against Amedisys in this regards covered a much shorter time frame from February 23, 2010 to May 13, 2010.
Amedisys, Inc., located in Baton Rouge, LA, is a provider of home health services to the chronic, co-morbid, aging American population. Amedisys, Inc. reported in 2007 Total Revenue of $697.93million, in 2008 Total Revenue of $1.18741billion, and in 2009 $1.51346billion. According to the complaint the plaintiff alleges that Amedisys, Inc. and certain of its officers and executives violated between Fe April 30, 2008 and June 30, 2010, the Securities Exchange Act of 1934 by issuing false and/or misleading statements, as well as by failing to disclose material adverse facts about its business, operations, and prospects.
On April 27, 2010, The Wall Street Journal reported that an analysis by the Wall Street Journal of Medicare payments to home health-care companies in recent years raised questions about whether some companies, including the sector’s largest company Amedisys Inc., are taking advantage of the Medicare reimbursement system. The article also names Gentiva Health Services Inc. (Nasdaq: GTIV), LHC Group, Inc. (Nasdaq: LHCG), and Almost Family Inc. (Nasdaq: AFAM). The April 26, 2010 article further stated that “[t]he results show that the number of in-home therapy visits tracks Medicare financial incentives.”
On May 13, 2010, the Wall Street Journal further reported that the Senate Finance Committee had launched an investigation into the practices of Amedisys Inc., Gentiva Health Services Inc., LHC Group Inc., and Almost Family Inc. According to the May 13 Wall Street Journal article, letters were emailed to the CEOs of each of the four companies requesting that each company provide information on their companies’ therapy visits from 2006 through 2009 and about financial relationships with referring physicians. Senate Finance Committee Chairman Max Baucus and Ranking Republican Member Charles Grassley wrote, "These findings suggest that HHAs are basing the number of therapy visits they provide on how much Medicare will pay them instead of what is in the best interests of the patients". Additionally, the May 13, 2010 article stated as follows: “The home therapy numbers cited in the [April 26, 2010 WSJ article], which came from publicly available Medicare claims, “suggest home health agencies intentionally increased utilization for the purpose of triggering higher reimbursements,” the senators wrote in letters that were emailed to the chief executives of the four companies”. Then on June 30, 2010, after the close of trading, Amedisys issued a press release that disclosed Amedisys Inc was under investigation by the U.S. Securities and Exchange Commission. On July 1, 2010, the price of Amedisys (AMED) shares declined from a close on June 30, 2010 of $43.98 per share, to close at $39.34 per share, a decline of $4.64 per share or approximately 11%. On July 13, 2010, shares of Amedisys, Inc. (AMED) dropped after the announcement of the Q2 2010 EPS Guidance Below Analysts' Estimates from $35.06 per share to almost $26 per share. AMED shares are down from its 52weekHigh of $64.28 per share.