Ahead Of The Bell: Chemed Receives Subpoena

NEW YORK (AP) — Chemed Corp. says its Vitas Healthcare business has been subpoenaed for documents by the U.S. Department of Justice as part of an investigation into its hospice services.

Chemed said the subpoena included requests for asked-for documents, patient records, and policy and procedure manuals dating back to Jan. 1, 2003. The company said it could not determine the issues being investigated. It received the administrative subpoenas on May 8.

Chemed is also dealing with a civil investigation into an alleged failure to appropriately bill Medicare and Medicaid for hospice services, but said it believes it is complying with Medicare and Medicaid hospice program rules.

The company, which is based in Cincinnati, also operates the Roto-Rooter plumbing business. It gets about two-thirds of its profit and revenue from Vitas.

Stifel Nicolaus analyst Eric Gommel said the recent subpoenas are apparently not related to the older investigation, which has been going on since April 2005. He said the stock is likely to decline based on the news, but kept a "Hold" rating on Chemed shares.

"It is not unusual for healthcare services providers to be subject to such government inquiries," he wrote.

In premarket trading, Chemed shares fell $4.33, or 10.5 percent, to $36.87.