Adeptus Health Securities Class Action
The standalone urgent care provider Adeptus Health, which operates numerous facilities throughout the U.S., is facing a securities class action lawsuit stemming from its billing practices. To learn more this case, visit Battea’s Adeptus Health case summary.
The suit alleges that the company “engaged in widespread predatory billing practices” and in particular may have misled people who were not in a condition to fully understand what kinds of treatments they were receiving and why. In doing so, the company exposed itself to significant financial risks and even criminal liability, and may have misled investors about how it handled those patients with lower acuity in particular. As such, Adeptus is alleged to have lacked a reasonable basis for its statements regarding its current and future business. The suit has a class period from June 24, 2014, to Nov. 1, 2016.
What happened?
The allegations stem from an investigative report regarding the company’s practices made late last year by Denver, Colorado, television station KUSA. After months of investigation, the station found that employees at Adeptus’s care facilities were using the Emergency Medical Treatment and Labor Act – which is designed to prevent hospitals from not treating patients who may not be able to pay for care they receive – as a pretext for not telling people what they would charge them for that care.
For instance, one man highlighted in the investigations was charged more than $16,000 for two CT scans, and only found out about the cost afterward, upon receiving his bill, the report said. While his insurance company and Adeptus itself picked up some of that charge, he was still left with bills totaling more than $10,000. If he had scheduled an appointment and paid up-front, those same scans would have cost less than $500. For its part, the care provider said the charges were “consistent with market averages.” The investigation also prompted comment from state legislators.
“[EMTALA’s] concept is good, but now it’s being turned on its head to say consumers can’t even get information about the costs,” Colorado State Representative Beth McCann, a Democrat representing Denver, told the station. “As a result, consumers don’t get good information.”
Adeptus previously claimed it referred lower-acuity patients to urgent care facilities, but allegedly did not actually do so, and instead engaged in the aforementioned billing practices.
How the news affected stock prices
The initial KUSA report was released in mid-November 2015, prompting a slight decline in Adeptus’s stock price over the remainder of that year. Things have been a little more up-and-down for the company throughout 2016, but a particularly large negative impact came at the start of November, around the time the company released its third-quarter financial reporting. On Nov. 1, the company’s stock price stood at $26.87, but it fell to just $8.60 the next day. It recovered only somewhat in the time since, and now stands at $9.81. That’s down from a year-to-date high of more than $71 per share.
For more information on this case or other class action litigations, please contact Kevin Doyle, Senior Vice President, at 203-987-4949 or info@battea.com.