LHC Group, Inc. (NASDAQ:LHCG) Investor Files Class Action Lawsuit Over Alleged Securities Laws Violations
June 13, 2012 (Shareholders Foundation) -- An investor in NASDAQ:LHCG filed a lawsuit in the U.S. District Court for the Western District of Louisiana against LHC Group, Inc. over alleged Violations of Federal Securities Laws in connection with its Medicare practices.
According to the complaint the plaintiff alleges on behalf of purchasers of LHC Group, Inc. (NASDAQ:LHCG) common stock during the period between July 30, 2008 and October 26, 2011, that LHC Group, Inc. and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing allegedly materially false and misleading statements regarding the Company's business and prospects.
LHC Group, Inc. reported that its annual revenue rose from $382.59million in 2008 to $633.87million in 2011. However, it reported that its Net Income over the same time frame fell from $30.23million to a Net Loss of $13.24million.
Shares of LHC Group, Inc. (NASDAQ:LHCG) rose from as low as $14.94 per share on April 25, 2008 to as high as $36.51 per share in April 23, 2010.
Specifically, the plaintiff alleges that the Defendants allegedly failed to disclose that the reported growth in LHC Group's home-based healthcare segment between July 30, 2008 and October 26, 2011, was created, in large part, by LHC Group, Inc. engaging in a pattern of practice designed to achieve the most profitable number of therapy visits under the Medicare home health program, manipulating the number of patient visits, regardless of patient need, to maximize revenue.
In May 2010, the LHC Group, Inc received a letter from the U.S. Senate Finance Committee in connection with a media report with the title“ Home Care Yields Medicare Bounty.” LHC Group said in June 2010 it completed its response to the Senate Finance Committee’s letter. Then in July 2010, LHC Group, Inc received a subpoena from the U.S. Securities and Exchange Commission (“SEC”) that included a request for documents related to LHC Group’s participation in the Medicare Home Health Prospective Payment System, as well as the documents and information produced in response to the Senate Finance Committee’s investigation. LHC Group said it produced the documents requested by the initial subpoena and produced additional documents requested by the SEC as part of its review.
In October 2011, LHC Group, Inc received a subpoena from the Department of Health and Human Services Office of Inspector General related to patients who received service from two of LHC Group’s locations in the State of Oregon and some additional documents related to it agencies in Oregon, Washington and Idaho.
Also in October the Senate Committee released a report on its investigation that found that LHC Group, Inc and two other home health care companies engaged in practices that "at best represent abuses of the Medicare home program" and "[a]t worst, they may be examples of for-profit companies defrauding the Medicare home health program at the expense of taxpayers."
Then on October 26, 2011, LHC Group, Inc disclosed that it was lowering its earnings forecast.
Within less than one year NASDAQ:LHCG shares fell from almost $30 in April 2011 to as low as $12.92 per share in November 2011.
On June 13, 2012, NASDAG:LHCG shares closed at $16.61 per share.