Federman & Sherwood Announces the Filing of a Securities Class Action Lawsuit against American Renal Associates Holdings, Inc.
Oklahoma City, OK (September 6, 2016) – On August 31, 2016, a securities class action lawsuit was filed in the United States District Court for the Southern District of New York against American Renal Associates Holdings, Inc. (NYSE: ARA) (the “Company”). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material or false misrepresentations to the market which had the effect of artificially inflating the market price during the Class Period, which is April 21, 2016 through August 18, 2016. More specifically, the Complaint alleges defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company’s business, operations and prospects. Specifically, the Complaint alleges that the defendants concealed from the investing public that: (1) the Company was engaged in a fraudulent scheme to steer patients away from qualified-for Medicare and Medicaid plans into more expensive Affordable Care Act (“ACA”) plans to obtain greater reimbursement for the Company’s dialysis services; (2) the foregoing scheme was in violation of federal and state laws; and (3) as a result of the foregoing, the Company’s public statements were materially false and misleading at all relevant times. As a result of defendants’ alleged false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period.
On July 1, 2016, three insurance companies filed a lawsuit against the Company 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 coverage 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 coverage.
Then, on August 18, 2016, the Centers for Medicare and Medicaid Services (the “Agency”), a federal agency within the U.S. Department of Health and Human Services, announced that it had sent warning letters to all dialysis centers that participate in the federal Medicare program. The Agency also stated that it is weighing financial penalties on providers found to have directed people eligible for Medicare into ACA plans instead - as the Company is alleged to have done.
On this news, the Company’s shares dropped to close at $19.81 per share on August 19, 2016, on heavy trading volume.
Plaintiff seeks to recover damages on behalf of all American Renal Associates Holdings, Inc. shareholders who purchased common stock during the Class Period and are therefore a member of the Class as described above. You may move the Court no later than Monday, October 31, 2016 to serve as a lead plaintiff for the entire Class. However, in order to do so, you must meet certain legal requirements pursuant to the Private Securities Litigation Reform Act of 1995.
To join this class action, click here to obtain an investor certification. Once complete, please email this form to firstname.lastname@example.org, fax to us at (405) 239-2112 or send by regular mail to Federman & Sherwood, 10205 North Pennsylvania Avenue, Oklahoma City, OK 73120, ATTN: Robin.