Kaplan Fox is the court appointed lead counsel in the securities class action against Gentiva Health Services, Inc. (“Gentiva” or the “Company”) and other related defendants in connection with Gentiva’s recent disclosure that it had materially misstated its financial results. In this case, Kaplan Fox represents the court appointed lead plaintiff, Los Angeles City Employees' Retirement System.
The Complaint alleges that, throughout the Class Period, Defendants reported growth in revenue and earnings that were, in large part, based on material increases in Medicare revenues and admissions in the Company's Home Health segment, but that defendants failed to disclose that the Company improperly increased the number of in-home therapy visits to patients for the purpose of triggering higher reimbursement rates under the Medicare Prospective Payment System.
The Complaint further alleges that on May 13, 2010, the Wall Street Journal reported that the United States Senate Finance Committee launched an investigation into the practices of companies that provide in-home therapy visits reimbursed by Medicare, including Gentiva and, that “[t]he committee is investigating whether the companies deliberately boosted the number of home therapy visits to trigger higher Medicare reimbursements.” On May 14, 2010, the price of Gentiva shares declined from a closing price on May 13, 2010 of $29.75 per share to close at $27.55 per share, a decline of $2.20 per share or approximately 7% on heavier than usual volume.
It is further alleged that on July 13, 2010, after the close of trading, Gentiva disclosed that it was “informed by the Securities and Exchange Commission that the Commission has commenced an investigation relating to Gentiva’s participation in the Medicare Home Health Prospective Payment System. The Company believes the investigation is similar to the Commission’s ongoing investigations and the Senate Finance Committee inquiry previously disclosed by Gentiva and other home health companies. The Commission requested that the company preserve all documents from January 1, 2000 to the present relating to its participation.” On July 13, 2010, the price of Gentiva shares closed at $22.30 per share. On July 14, 2010, during intra-day trading, the price of Gentiva shares declined to $19.91 per share, a decline of 11%, before closing at $21.99 per share, on heavier than usual volume.
Finally, it is alleged that on July 20, 2010, after the close of trading, Gentiva disclosed its financial results for the fiscal quarter ended July 4, 2010. Among other things, the Company disclosed that “in light of recent softness in home health episodic volumes and the anticipated seasonality in third quarter volumes as experienced by the Company historically, Gentiva has reduced its full-year revenue guidance to a range of $1.20 billion to $1.23 billion from its prior guidance of between $1.23 billion to $1.26 billion.” On July 21, 2010, Gentiva shares declined from a close on July 20, 2010 of $21.60 per share, to close at $19.96 per share, a decline of $1.64 per share or approximately 8% on heavier than usual volume. The next trading day, the price of Gentiva shares declined an additional $0.56 per share, for a two day decline of approximately 10%.
On April 7, 2015, Judge Arthur D. Spatt, Senior U.S. District Judge for the Eastern District of New York, preliminarily approved a settlement of $6.5 million for this action. The hearing to determine whether to give final approval to the Settlement in this matter is scheduled for September 11, 2015, at 9:00 a.m. at the U.S. District Court for the Eastern District of New York, Central Islip Courthouse, 100 Federal Plaza, Central Islip, New York.
If you purchased the publicly traded common stock of Gentiva Health Services, Inc. between July 31, 2008 and October 4, 2011 (the “Settlement Class Period”), inclusive, and suffered alleged damages as a result, you are a member of the Settlement Class and could get a payment from the Settlement. Please review the documents below for more information. You may also visit the Gentiva Securities Litigation website (www.gentivasecuritieslitigation.com) for more information about the Settlement.