A securities class action has been filed in the USDC – E.D.PA. against AdaptHealth Corp. (AHCO) (“AdaptHealth” or the “Company”), on behalf of a class consisting of all persons and entities that purchased or otherwise acquired: (i) AdaptHealth Corp. (“AdaptHealth” or the “Company”) common stock between August 4, 2020 through February 27, 2023, both dates inclusive (the “Class Period”); and/or (ii) AdaptHealth common stock pursuant and/or traceable to the Company’s secondary public offering conducted on or around January 5, 2021 (the “SPO”).
Headquartered in Plymouth Meeting, Pennsylvania, AdaptHealth is a distributor of home medical equipment. AdaptHealth principally provides home medical supplies for chronic health conditions including diabetes, sleep apnea, and wound care. AdaptHealth’s diabetes supply segment now constitutes more than a third of the Company’s net sales revenue. AdaptHealth sells medical equipment to patients, and bills patients’ insurance providers in order to receive reimbursements. AdaptHealth works with private insurance providers as well as Centers for Medicare and Medicaid Services (“CMS”). Indeed, AdaptHealth receives a “substantial” portion of its revenues from CMS.
The Complaint alleges that, throughout the Class Period, AdaptHealth and certain of its senior executives orchestrated a scheme to overcharge CMS and other insurance providers by submitting improper billing codes for diabetes equipment. To facilitate this scheme, AdaptHealth and certain of its senior executives made numerous false and misleading statements to investors during the Class Period. As a result of these misrepresentations, AdaptHealth common stock traded at artificially inflated prices during the Class Period, thereby harming investors.
The truth about AdaptHealth’s misconduct was revealed on February 27, 2023, when the Company announced a surprise loss of $0.02 per share for the fourth quarter of 2022, which was significantly lower than the gain of $0.27 per share that analysts and investors were led to expect. The Company also reduced its guidance for 2023, lowering revenue expectations it had provided just seven weeks earlier by over 1.5%. AdaptHealth attributed the miss and lowered guidance to “tempered expectations on diabetes.” As a result of these disclosures, the price of AdaptHealth common stock declined precipitously.
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