NEW YORK--(BUSINESS WIRE)--Bragar Eagel & Squire, P.C. announces that a class action lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of all persons or entities who acquired American Renal Associates Holdings, Inc. (NYSE:ARA) securities between April 18, 2016 and August 18, 2016 (the “Class Period”).
The action is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired American Renal securities: (1) pursuant and/or traceable to American Renal’s false and misleading Registration Statement and Prospectus issued in connection with the Company’s initial public offering on or about April 21, 2016 (the “IPO” or the “Offering”); and/or (2) on the open market between April 21, 2016 and August 18, 2016, both dates inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws.
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 (“ESRD”). As of March 31, 2016, it owned and operated 194 dialysis clinics in 25 states and the District of Columbia.
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.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, 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 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 July 1, 2016, three insurance companies filed a lawsuit against American Renal and an affiliated entity in the United States District Court for the Southern District of Florida, alleging that American Renal was engaged in a “fraudulent and illegal scheme” that involved persuading patients who qualified for Medicare or Medicaid 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. As Medicaid and Medicare provide for only predetermined reimbursement rates for dialysis services, the suit alleges that American Renal would thus receive much larger reimbursements from the ACA insurer as a commercial payor than it would have from Medicare or Medicaid.
On 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.
On August 18, 2016, the Centers for Medicare and Medicaid Services (“CMMS”) announced that it had sent warning letters to all dialysis centers that participate in the federal Medicare program. CMMS 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.
On this news, American Renal’s share price fell $2.31, or 10.44%, to close at $19.81 on August 19, 2016.
If you purchased American Renal securities during the Class Period, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters please contact J. Brandon Walker, Esq. by email at email@example.com, or telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
Bragar Eagel & Squire, P.C. is a New York-based law firm concentrating in commercial and securities litigation. For additional information, please go to www.bespc.com.