UPDATE 1-Home healthcare shares down on U.S. Senate probe

* Senate Finance Committee probes for-profit companies

* Target Amedisys, Gentiva, LHC Group and Almost Family

* Shares fall

(Adds company comment, updates shares)

WASHINGTON, May 13 (Reuters) - Shares of four for-profit home healthcare agencies fell on Thursday amid a U.S. Senate Finance Committee investigation over billing practices it says raise questions about reimbursement from the Medicare insurance program.

In a bipartisan letter to the companies -- Amedisys Inc AMED.O, Gentiva Health Services Inc GTIV.O, LHC Group Inc LHCG.O, Almost Family AFAM.O -- lawmakers said it appeared the companies increased billing to help boost their profits.

Their letter follows a recent analysis about the industry in the Wall Street Journal that the lawmakers said “suggest HHAs (home healthcare agencies) intentionally increased utilization for the purpose of triggering higher reimbursements.”

“These findings suggest that HHAs are basing the number of therapy visits they provide on how much Medicare will pay them instead of what is in the best interests of patients,” Senate Finance Committee Chairman Max Baucus and Ranking Republican Member Charles Grassley wrote.

When Medicare changed its payment rules to provide additional reimbursement to patients when they had six, 14 and 20 therapy visits, “the home health industry apparently changed their utilization patterns as a result of these payment policy changes,” the lawmakers said.

They also questioned marketing materials that aim to target seniors “to take advantage of Medicare payments to improve profits.”

Home health care companies provide medical services such as physical therapy in patients’ homes and can serve as an alternative to residential or long-term care health facilities. They must be certified to provide care to Medicare patients.

The lawmakers’ committee has oversight of the Medicare insurance program for the elderly and disabled, which covers more than 45 million Americans.

In various company statements, the four companies said they would cooperate with the committee’s investigation but that they are focused on providing quality patient care. Amedisys and Almost Family challenged the Journal report, saying it was inaccurate or incomplete.

“The care that Gentiva delivers is based on the patient’s clinical needs as ordered by their physicians,” Gentiva said.

The senators also asked the companies for a variety of documents that date back as far as 2006, including data on therapy visits, lists of physicians with the highest patient referrals to the agencies, and copies of all marketing materials.

In afternoon trading on the Nasdaq, shares of Amedisys were off 8.8 percent at $51.26 while shares of Gentiva Health Services were down 6.3 percent at $27.88.

Shares of LHC Group fell 2.5 percent at $35.21 and Almost Family were down 7.8 percent at $39.27.

Despite the pressure on shares, some analysts saw little reason to be concerned.

“Although it is never positive to be on lawmakers’ radar, we would be surprised if it leads to anything,” Oppenheimer & Co analyst Michael Wiederhorn wrote in a research note, noting that any action Congress takes would have to be industrywide.

Reporting by Susan Heavey; additional reporting by Anuradha Ramanathan in Bangalore; editing by Dave Zimmerman, Phil Berlowitz