A class action has been filed in the United States District Court for the Western District of Kentucky on behalf of purchasers (the "Class") of Almost Family, Inc. ("Almost Family" or the "Company") (NASDAQ: AFAM) common stock during the period of November 4, 2009 and June 30, 2010, inclusive (the "Class Period").
The complaint charges Almost Family and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Almost Family is a provider of home health services.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's operations and its business and financial results and outlook. Defendants misled investors by failing to disclose that: (i) the Company was deliberately increasing the number of unnecessary home therapy visits in order to receive increased Medicare reimbursements; and (ii) as a result of defendants' conduct, the Company's reported sales and earnings were materially inflated. As a direct result of defendants' false statements, Almost Family's common stock traded at artificially inflated prices during the Class Period, reaching a high of $43.96 per shares on April 29, 2010.
On April 26, 2010, The Wall Street Journal published an article entitled "Home Care Yields Medicare Bounty." The article called into question whether four home health care companies, including Almost Family, were taking advantage of the Medicare reimbursement system. More specifically, the article revealed that the home health care companies, such as Almost Family, billed a higher number of the most profitable home therapy visits for their Medicare patients, while at the same time billing fewer of the least profitable therapy visits. Then, on July 1, 2010, before the market opened, Almost Family announced that the Company had received a civil subpoena for documents and a notice of an investigation from the SEC. The subpoena seeks all documents relating to "the Company's home health care services and operations, including reimbursements under the Medicare home health prospective payment system, since January 1, 2000." As a result of this negative news, Almost Family's common stock fell $3.88 per share or 11.11%, on July 1, 2010, on high volume.
Plaintiffs seek to recover damages on behalf of all Class members who purchased or otherwise acquired common stock of Almost Family during the Class Period.
