According to the Complaint, on April 26, 2010, The Wall Street Journal published an article entitled “Home Care Yields Medicare Bounty” which detailed an analysis of Medicare payments to home health-care companies (such as LHC) and questioned whether some companies were taking advantage of the Medicare reimbursement system. In May of 2010, the Senate Finance Committee launched an investigation into the allegations contained within this article. On May 12, 2010, LHC issued a press release announcing that the Company had received a request for information from the Committee, and detailed some of the information that it would be providing in response. Following this announcement by the Company, LHC’s stock price declined 7.2% over the next two days.The Company issued a press release on July 13, 2010 announcing that it had received a request from the Securities and Exchange Commission to preserve all documents relating to LHC’s Medicare reimbursement practices. This announcement led to the price of the Company’s stock declining 7.2% over the next two days. On September 30, 2011, the Company announced that it reached a settlement agreement with the government to resolve the civil inquiry involving Medicare reimbursement for home health services for the period of 2006 to 2008. While the Company admitted no wrongdoing, they agreed to pay $65 million. The Senate Finance Committee released a report of October 3, 2011 analyzing the home therapy practices of LHC and other companies in the industry. That report concluded that “The home health therapy practices identified at [LHC] . . . at best represent abuses of the Medicare home health program. At worst, they may be examples of . . . defrauding the Medicare home health program at the expense of taxpayers.” Following the release of this report, stock in LHC fell from $17.06 to $15.01 per share, a two-day decline of 12%.
Finally, on October 26, 2011, the Company issued a press release announcing that it was lowering its earnings forecast in part as a result of the settlement of its improper Medicare practices. On this news, the price of LHC’s stock dropped over 15%, closing at $15.89 on October 27, 2011, from a previous close of $18.84.If you wish to serve as lead plaintiff, you must move the Court no later than August 13, 2012. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States. Attorney advertising. Prior results do not guarantee a similar outcome.