Hanger Orthopedic Group
plunged in heavy trading Wednesday in the wake of the company's decision to postpone its earnings report to "complete certain accounting reviews."
The Bethesda, Md.-based company late Monday said the "accounting matters have no relation to the allegations of billing discrepancies at the patient care center in West Hempstead, N.Y., and preliminary findings of the independent investigation are being announced in a separate news release." The company had been scheduled to report earnings after the bell Monday.
Shares fell $3.83, or 40%, to $5.68, a new 52-week low, on Wednesday. More than 2.2 million shares changed hands, compared to daily average volume of about 307,000. Oddly, there was little reaction Tuesday, when shares closed just 3 cents lower in less-than-normal volume.
Hanger will now report earnings after the market closes on Aug. 16.
The billing discrepancies first became public in June when
in New York reported that the company was "facing investigation for allegedly stealing from Medicare, Medicaid and insurance companies." The report, paraphrasing a Hanger employee, said "thousands of patient files are forged or nonexistent."
Hanger at the time said it had "been made aware of alleged billing irregularities" by an employee at one of its 608 medical outlets and "in conjunction with its outside counsel, has initiated a prompt and thorough investigation of these allegations." The company later said it had been subpoenaed by federal prosecutors in New York and also received a request for information from the
Securities and Exchange Commission
Since then shareholders have filed lawsuits against the company, alleging it artificially inflated the price of its stock through fraudulent actions.
Hanger describes itself as "the world's premier provider of orthotic and prosthetic patient-care services." It has operations in 44 states and the District of Columbia, with 3,115 employees.