* 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
July 1 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
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)