ABiz -> Acadiana Business THU, JUL 15 7:48AM by Leslie Turk

LHC Group's shares fall again on confirmation of SEC probe

The Securities and Exchange Commission has expanded the scope of its Medicare billing investigation, bringing Lafayette-based LHC Group under scrutiny.

The company announced after market close Tuesday that the SEC asked it to preserve all documents related to its Medicare reimbursement policies. The SEC also notified the company that it will issue a subsequent request to produce the documents.

Gentiva Health Services was also notified, bringing the number of home health care companies that the SEC is investigating to four; market leader Amedisys Inc. of Baton Rouge and Almost Family were notified by the SEC July 1.

The widening investigation did not seem to come as much of a surprise to the market, as LHC Group’s stock fell only 2.3 percent, closing at $22.49 Wednesday; shares did, however, hit a year-low of $20.50 in early trade Wednesday, having traded as high as $37.36 on April 20. The company’s stock had already tumbled 12 percent after Amedisys and Almost Family were notified. All of the companies' shares fell similarly at that time.

LHC Group said it is cooperating fully with the SEC review of its billing practices.

Prompted by a Wall Street Journal investigative story earlier this year, the Senate Finance Committee began looking into whether home health providers intentionally increase the number of therapy visits to trigger higher reimbursements. When they visit patients 10 times, the companies are reimbursed an additional $2,200 per patient.

On word of the investigation, analyst Kevin Ellich of RBC Capital Markets downgraded LHC Group shares to "Sector Perform" from "Outperform," noting physicians, therapists, clients and companies may cut back on business with LHC Group because of the investigation. He also lowered his 2010 and 2011 profit estimates for LHC and cut his price target from $30 per share to $25.

The SEC investigation is likely to change home health agencies’ billing practices, he says. "History has shown us that other providers billed government sources more conservatively when scrutinized for ‘upcoding’ or billing too aggressively and we believe this dynamic could follow suit in the home health industry."

Related Articles:

Articles by this Author:

View all articles by this author

Comments (3)

Subscribe to this comment's feed

...
written by Morrow , July 15, 2010 - 09:31 pm

Oh, Mercy! This is SO good. I know in my family, there have been doctors who scheduled appts that were unecessary. I also know of hospitals who billed for way more saline than was used. Incidens such as those. I welcome and encourage the checking. I hope someone's looking at "the angels". Until recently, I know of two elderly ladies, in the same household, who each had a sitter - for a few months. The care service should have seen to it that one sitter could serve both. Better to bill twice. I just kept thinking that someone who needed a sitter wasn't getting it.

...
written by Spastic Colon , July 16, 2010 - 07:24 pm

Naturally, all of the problems will be solved with Obama Care (yeah right).

...
written by NORTHSIDIAN SHOTGUN , July 21, 2010 - 09:01 pm

MORROW ! Either, we know of the same case scenario, or " THIS IS A COMMON OCCURRENCE.

You must be logged in to post a comment. Log in using your Facebook account or register if you do not have an account yet.

Most Read

David Calhoun, ‘EB’ Brooks join Lafayette Central Park

David Calhoun and Elizabeth “EB” Brooks are the first two employees of Lafayette Central Park Inc., the nonprofit charged with turning Lafayette Consolidated Government’s 100-acre Johnston Street Horse Farm property into a passive public park. Calhoun was named executive director, and Brooks is director of planning and design.
Alex Lege: 'The Cop Watcher'

Is it a crime for citizens to photograph, video, or take notes of a police officer in the line of duty, or a right protected by the First Amendment of the U.S. Constitution? Locally, such activity, as witnessed recently, will at the very least result in a night spent behind bars.
Update: PXP creating 600 jobs averaging 100k

At Thursday's State of the Economy luncheon, LEDA President and CEO Gregg Gothreaux said PXP has already quietly hired 180 people for its Broussard expansion.
Zachary Barker takes helm of the Opportunity Machine

Zachary Barker continues making waves in Lafayette’s business scene, mostly recently being named director of the Opportunity Machine.
Shakin' at the Shack

There will soon be a whole lot of shakin’ going on at Benny’s Sportshack Supplement Depot, a new concept by Opelousas native Benny Nele. Located at 2002 Johnston St., the supplement shop, smoothie bar and café, featuring hot off the press paninis and wraps, plans to open in late May.

in case you missed it

COOL TOWN 2013

This year’s Cool Town issue is all about people who are not native to South Louisiana but made a conscious decision to be here, to be among us, to participate in our culture and contribute to it.
A curious compact

A shelved ordinance transferring $200,000 from a northside drainage project to a south Lafayette development may not break any laws, but it stinks to high heaven.
Pooyie 2012

It's good, it's bad and it's just plain crazy.
Saving Saturday Night

An effort to restore a shuttered dancehall and document other vacant or razed honky-tonks could serve as a model for saving an endangered species of entertainment.
Posthaste vs. HART FORTENBERY

Lafayette’s gene pool has been host to a long line of eccentric characters who have blurred the lines between crazy, genius, disturbed and curiously entertaining.