A securities class action has been filed in the USDC — W.D.TX. against agilon health, inc. (AGL) (“agilon” or the “Company”), on behalf (a) all persons and entities that purchased or otherwise acquired agilon health, inc. (“agilon” or the “Company”) common stock between January 9, 2023 through January 4, 2024, both dates inclusive (the “Class Period”); and (b) all persons and entities that purchased or otherwise acquired agilon common stock pursuant, or traceable, or both, to the secondary public offering (the “SPO”) Materials issued in connection agilon’s May 2023 SPO.
agilon, headquartered in Austin, Texas, generates profits from reducing medical expenditures. By partnering primarily with Medicare Advantage (“MA”) plans as well as traditional Medicare and commercial managed care organizations, agilon receives a fixed monthly payment from payers for each patient under its care. In return, agilon takes on the responsibility of managing the total cost and quality of care for those patients. This model incentivizes agilon and its contracted physician partners to focus on preventive care and improve health outcomes in order to control costs. If the total cost of caring for patients is less than the fixed payments agilon receives, it realizes a profit. However, if costs exceed the payments, agilon incurs a loss. This aspect of financial risk is inherent in agilon’s business model.
The Complaint alleges that, throughout the Class Period and in the SPO Materials, Defendants misled investors about agilon’s medical costs by:
(1) touting the Company’s purported visibility into utilization trends and medical costs;
(2) failing to disclose increased medical costs that agilon had incurred prior to and during the Class Period due to higher utilization of healthcare by MA patients;
(3) falsely stating that its accounting reserves for higher-than-expected medical costs were adequate;
(4) making false and misleading statements about the effectiveness of its business model;
(5) issuing overly optimistic financial guidance; and
(6) issuing risk disclosures that were materially false and misleading because they characterized adverse facts that had already materialized as mere possibilities.
After several Company reports, agilon’s stock closed at $8.63 on January 5, 2024.
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