Investor Lawsuit Against Amedisys Moving Forward
A class action lawsuit against Amedisys Inc. (Nasdaq: AMED) has been allowed to proceed, in part, under a ruling by U.S. District Chief Judge Brian A. Jackson of Louisiana. The suit alleges Amedisys and seven current or former members of Amedisys’s senior management defrauded investors by concealing a Medicare fraud scheme.
The particular rule named in the case forbids companies and its officials from using any deceptive device to make untrue statements about publicly traded securities. The lawsuit alleges the company misled investors through concealment of the fraud scheme. Amedisys, the nation’s second largest home health care provider, paid a major settlement to the Department of Justice (DOJ) related to fraud allegations and saw its stock price cut by marathon half over a four-year period.
In April 2015, Amedisys agreed to pay the federal government $150 million to resolve allegations that the company violated the False Claims Act, according to the DOJ. Stock prices plummeted from $66 per share in 2011 to $27 per share in 2015.
The settlement resolved claims that Amedisys and some of its executives improperly inflated Medicare reimbursements by pressuring nurses and therapists to increase the number of visits for certain patients, according to court documents. This also allowed the company to avoid price adjustment that would have lowered reimbursement rates.
The lawsuit can now move forward, in part, with the claims investors’ have made that Amedisys defrauded them, following an attempt by Amedisys to have the case dismissed. However, claims related to four of the seven executives in question were dismissed with prejudice.
Since Amedisys settled its fraud allegations with the DOJ in 2014, the company has undergone major changes, including an extensive leadership overhaul with a new president and CEO. Additionally, the home care provider has seen its stock price rebound, recovering well above its recent lows.
Amedisys declined to comment for this story.
Written by Alana Stramowski