Chemed (CHE) Securities Fraud Class Action Lawsuit
Chemed (CHE) securities fraud class action summary
On May 2, 2013, The Department of Justice of the United States (DOJ) sued Chemed Corporation and various wholly owned hospice subsidiaries, including Vitas Hospice Services LLC and Vitas Healthcare Corporation, alleging false Medicare billings for hospice services. On news of this lawsuit, Chemed shares plunged 17% in one trading day, losing $258 million in value for shareholders. This securities fraud class action then addresses the questions of whether senior management knew of the alleged fraud and/or whether senior management had sufficient controls in place to mitigate fraud activities.
Chemed: largest for profit hospice chain in United States and owner of Roto-rooter
Vitas is the largest for-profit hospice chain in the United States and provides hospice services to patients in 18 states (Alabama, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Michigan, Missouri, New Jersey, Ohio, Pennsylvania, Texas, Virginia and Wisconsin) and the District of Columbia.
Chemed securities fraud lawsuit based upon allegations in DOJ false claims act complaint
The government’s complaint alleges:
- Chemed and Vitas Hospice knowingly submitted or caused the submission of false claims to Medicare for crisis care services that were not necessary, not actually provided, or not performed in accordance with Medicare requirements. (Medicare pays a higher rate for crisis care services than for normal hospice care services.)
- Chemed and Vitas Hospice used aggressive marketing tactics and pressured staff to increase the numbers of crisis care claims submitted to Medicare, without regard to whether the services were appropriate or were actually being provided.
- Chemed and Vitas knowingly submitted or caused the submission of false claims for hospice care for patients who were not terminally ill.
- Chemed and Vitas paid bonuses to staff based on the number of patients enrolled in the program and based on patients who were admitted for longer lengths of stay, and took adverse employment actions against marketing representatives who did not meet monthly hospice admissions goals.
Chemed shareholders lose $258 million in one trading day
On news of this investigation, SHE shareholders saw CHE stock shed 18% of its value (or $258 million) in one trading day.
Chemed (CHE) securities fraud class action lawsuit
Did senior executives at Chemed knowing engage in conduct to over bill the United States government? Did senior executives sell their own shares of CHE while knowingly engaging in unlawful conduct? Complete the web form on this page if you are a Chemed shareholder and would like to learn more about our investigation.
CHE shareholders: Free legal review to see if your losses qualify.