* Investigation related to billing practices
* Cos get subpoena for related documents
* Amedisys shares fall 22 pct; Almost Family down 15 pct (Recasts; adds background, analyst comments; updates stock movement)
July 1 (Reuters) - Home healthcare companies, Amedisys Inc (AMED.O) and Almost Family (AFAM.O) said U.S. regulators have launched an investigation into the companies' billing practices, sending their shares crashing.
The Securities and Exchange Commission (SEC) also issued civil subpoena Wednesday seeking documents from the two companies, which provide medical services in patients' homes.
The action follows an investigation launched on the same issues by the U.S. Senate finance committee in May, which was prompted by a media article that suggested home healthcare providers intentionally increased the number of therapy visits for triggering higher reimbursements. [ID:nN13268477]
"While we have never expected the controversy surrounding Amedisys and the home health industry to go away, we are very surprised that this has turned into a formal SEC investigation," Oppenheimer & Co analyst Michael Wiederhorn said.
Wiederhorn, who maintained his "outperform" rating on Amedisys stock, said the issues discussed are industry-wide that should lead to broad changes to reimbursement policy.
The subpoena seeks documents related to the company's home health care services and operations, including reimbursements under the Medicare home health prospective payment system, since January 1, 2000, Almost Family said.
Raymond James analyst John Ransom said, although the issue under discussion is "relatively old news", the investigation is likely to trigger further concerns that could weigh on the shares of the sector for an extended period.
The reimbursement system was changed in 2008 as the prior system was widely acknowledged to be flawed, he added.
Ransom downgraded Amedisys to "market perform" following the formal investigation notice from the SEC.
Shares of Amedisys were trading down 14 percent at $37.87 Thursday on Nasdaq after touching a low of $34.13, while Almost Family shares were down 12 percent at $30.57.
Shares of healthcare companies Gentiva Health Services Inc GTIV.O and LHC Group Inc (LHCG.O), which are also being probed by the Senate finance committee, were also trading down 13 percent and 11 percent in early morning trade respectively. (Reporting by Krishnakali Sengupta in Bangalore; Editing by Prem Udayabhanu and Don Sebastian)