LHC Group, Inc. (Nasdaq: LHCG)
A class action lawsuit has been filed in the United States District Court for the Western District of Louisiana on behalf of a class (the "Class") of purchasers of LHC Group, Inc. (Nasdaq: LHCG) common stock between July 30, 2008 and October 26, 2011 (the "Class Period"). The complaint alleges violations of the Securities Exchange Act of 1934.
The securities class action charges LHC and certain of its officers and directors with violations of the Exchange Act. The Company, together with its subsidiaries, provides post-acute health care services primarily to Medicare beneficiaries throughout the United States. LHC is headquartered in Lafayette, Louisiana.
The complaint filed in the action alleges that, throughout the Class Period, the Defendants issued materially false and misleading statements regarding the Company's business and prospects. Specifically, the complaint alleges that the Defendants failed to disclose that the reported growth in LHC's home-based healthcare segment during the Class Period was created, in large part, by the Company 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.
The complaint alleges that the truth began to come to light on May 12, 2010, when LHC announced that the Company received a letter from the Senate Finance Committee asking LHC to respond to questions regarding therapy utilization in prior years. It is alleged that this partial disclosure caused LHC's stock price to sharply decline, removing some of the stock inflation. Then, following the Company's July 13, 2010 announcement that it had received a request from the Securities and Exchange Commission to preserve all documents relating to LHC's Medicare reimbursement practices, the Company's stock fell further on heavy trading volume. The complaint alleges that this decrease in the price of LHC's stock was a result of some of the artificial inflation caused by Defendants' misleading statements coming out of the price.
On October 3, 2011, the Senate Committee released a report on its investigation that found that LHC 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." That day, the price of LHC shares fell $1.42 per share, or 8.3%, to close at $15.64. Finally, on October 26, 2011, LHC disclosed that the Company was lowering its earnings forecast, in part because of a payment to the federal government to settle an inquiry into whether LHC improperly billed for home health services that were medically unnecessary. On this news, LHC's stock price fell an additional 15% in a single trading session.
If you are a current shareholder and/or purchased stock between July 30, 2008 through Oct. 26, 2011, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.