Home-health companies' stock takes hit as SEC investigates their Medicare reimbursement

The Wall Street Journal: Amedisys and Almost Family, two home health care companies, said Thursday that they are the focus of a Securities and Exchange Commission investigation into their Medicare reimbursement practices, one month after the U.S. Senate began its own inquiry. "The investigation is related to the SEC probe, which revolves around whether the companies pushed patients into extra, sometimes unnecessary, home-health care visits in order to hit a threshold level that secured them thousands more in reimbursements from the government's health-care program." A Wall Street Journal article in April first reported the practice. Gentiva Health Services Inc. and LHC Group were also part of the Senate inquiry. "LHC spokesman Eric Elliott said the company hasn't 'received anything or had any contact with SEC.' Gentiva's spokesman wasn't immediately available for comment, and an SEC spokesman declined to comment. Shares of Amedisys, the nation's largest home health-care company, slumped more than 16% in Thursday midday trading, while Almost Family slid 13%. Gentiva was down 12% and LHC lost about 9%" (Benoit, 7/2).

Bloomberg Businessweek: "The U.S. Senate Finance Committee in May said it was reviewing whether the home-nursing industry manipulated the number of visits made to patients to boost government reimbursements. The Almost Family and Amedisys statements suggest the probe is widening and raise the risk that other agencies may expand it further, said Sheryl Skolnick, a CRT Capital Group LLC analyst in Stamford, Connecticut" (Nussbaum, 7/1).

Reuters: "The Securities and Exchange Commission (SEC) also issued civil subpoena Wednesday seeking documents from the two companies, which provide medical services in patients' homes. … Raymond James analyst John Ransom said, although the issue under discussion is 'relatively old news,' the investigation is likely to trigger further concerns that could weigh on the shares of the sector for an extended period. The reimbursement system was changed in 2008 as the prior system was widely acknowledged to be flawed, he added" (Sengupta, 7/1).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.