LHC Group Falls On Whistleblower Lawsuit

NEW YORK (AP) — Shares of home nursing provider LHC Group Inc. slid Wednesday after the company said it is being sued by a former employee who claims she was fired because of her complaints over alleged fraudulent billing practices.

The stock lost 80 cents, or 4 percent, to $19.45 in midday trading, after sinking as much as 9.8 percent earlier in the session. Shares have traded between $13.55 and $36.83 over the last 52 weeks.

Former employee Sally Christine Summers filed the lawsuit in Tennessee, alleging the company fired her because she complained that LHC would recommend unnecessary care for patients and continue to bill Medicare.

The Lafayette, La.-based company said Summers was fired in December for cause. It also said the lawsuit was improperly and illegally filed in public and not under seal.

"As is customary when any allegation is made, in accordance with our compliance program we initiated a thorough internal review of the allegations," LHC said in a regulatory filing with the Securities and Exchange Commission. "We concluded based on that review that the proper level of care was provided and necessary."

RBC Capital Markets analyst Kevin Ellich brushed off the lawsuit, saying it is likely to be dismissed. Still, he said, the perception of potential wrongdoing could put negative pressure on LHC's stock.

He reaffirmed a "Sector Perform" rating in a note to investors.