According to the complaint, American Renal operates as a dialysis services provider in the United States focused exclusively on joint venture partnerships with physicians. The company, through its subsidiaries, owns and operates kidney dialysis facilities for patients suffering from chronic kidney failure or end stage renal disease.
The complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose that: (i) American Renal was engaged in a fraudulent scheme to steer patients away from qualified-for Medicare and Medicaid plans into more expensive Affordable Care Act (“ACA”) plans to obtain greater reimbursement for the company’s dialysis services; (ii) the foregoing scheme was in violation of federal and state laws; and (iii) as a result of the foregoing, American Renal’s public statements were materially false and misleading at all relevant times.
On or about April 21, 2016, American Renal completed its IPO, issuing 8.625 million shares of common stock and raising net proceeds of approximately $189.75 million.
According to the complaint, on July 1, 2016, three insurance companies filed a federal lawsuit against American Renal, alleging that American Renal was engaged in a “fraudulent and illegal scheme” that involved persuading patients who qualified for Medicare or Medicaid coverage to enroll in commercial healthcare plans and then putting those patients in touch with an American Renal-patronized charity that would pay the patients’ insurance premiums in full or in part. Following this news of the lawsuit, American Renal’s stock price fell $2.82 per share, or 9.88%, to close at $25.71 on July 5, 2016, the next trading day.
Then, on August 18, 2016, the Centers for Medicare and Medicaid Services (the “Agency”), a federal agency within the U.S. Department of Health and Human Services, announced that it had sent warning letters to all dialysis centers that participate in the federal Medicare program. The Agency also stated that it is weighing financial penalties on providers found to have directed people eligible for Medicare into ACA plans instead—as American Renal is alleged to have done. Following this news, American Renal’s share price fell $2.31, or 10.44%, to close at $19.81 on August 19, 2016.
If you are a member of the class described above, you may no later than October 31, 2016 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
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