July 1 (Bloomberg) -- Amedisys Inc., the largest U.S. home-nursing provider, dropped the most in 10 months in New York trading after saying the U.S. Securities and Exchange Commission was probing whether the company manipulated Medicare payments.
Amedisys fell $4.64, or 11 percent, to $39.94 at 4 p.m. in Nasdaq Stock Market composite trading, the biggest one-day drop for the Baton Rouge, Louisiana-based company since Sept. 3. Almost Family Inc., the fourth-largest home-nursing provider, declined $3.88, also 11 percent, to $31.05, the most since February 2009, after the Louisville, Kentucky-based company said in a statement that it, too, was under SEC investigation.
The U.S. Senate Finance Committee in May said it was reviewing whether the home-nursing industry manipulated the number of visits made to patients to boost government reimbursements. The Almost Family and Amedisys statements suggest the probe is widening and raise the risk that other agencies may expand it further, said Sheryl Skolnick, a CRT Capital Group LLC analyst in Stamford, Connecticut.
“The industry is especially adept at optimizing therapy visits in order to receive higher reimbursements,” Skolnick said in a note to clients. “We would not own shares in this group and expect trading in these shares to reflect that view.”
Gentiva Health Services Inc., the second-biggest home-nursing company, said today it hadn’t received subpoenas or any “notice of formal investigation” from the SEC. The Atlanta-based company also said it was cooperating with the finance committee. Gentiva fell $3.08, or 11 percent, to $23.93 in Nasdaq trading, its biggest single-day decline in 16 months.
LHC Group Inc., the third-largest U.S. home-nursing company, declined $3.34, or 12 percent, to $24.41, its biggest drop since February 2008.
Amedisys will cooperate with the probe and “understands that the SEC is also investigating others in the home health industry regarding matters being examined by the Senate Finance Committee,” the company said in its statement.
Almost Family has been “cooperating fully with the Senate Finance Committee, and we will do the same with the SEC,” said William Yarmouth, its chief executive officer, in his statement.
The Senate Finance Committee review followed an April 27 article in The Wall Street Journal that questioned reimbursement patterns in the industry.
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