DaVita investors may receive additional information about the case by clicking the link "Join this Class Action" above.
According to the complaint, DaVita provides kidney dialysis services for patients suffering from chronic kidney failure or end-stage renal disease. At relevant times, DaVita made contributions to the American Kidney Fund (“AKF”), a purported charitable foundation that provides financial assistance toward patients’ health insurance premiums.
The complaint alleges that on August 18, 2016, The Centers for Medicare & Medicaid Services issued a public request for information regarding the alleged steering of Medicare and Medicaid beneficiaries into other plans in order to earn higher reimbursement rates. Following this news, shares of the company’s stock declined $3.17 per share, or 4.7%, to close on August 19, 2016 at $64.48 per share.
Then, on October 23, 2016, the St. Louis Post published an article entitled “DaVita encouraged some low-income patients to enroll in commercial plans” which directly accused DaVita of steering clients to private insurers and utilizing its own money to pay for health insurance premiums through the AKF. Following this news, shares of the company’s stock declined an additional $2.86 per share, or 4.7%, to close on October 24, 2016 at $58.10 per share.
Finally, on January 6, 2017, The Wall Street Journal reported that investigators from the U.S. Department of Justice “are probing a controversial arrangement under which kidney-care companies support charitable efforts to help patients pay health-insurance premiums, according to disclosures from major dialysis providers.” Additionally, the article reported that the “Boston U.S. attorney’s office has subpoenaed DaVita Inc. … seeking ‘the production of information related to charitable premium assistance.’”
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose:: (1) that the company and its senior executives purposefully steered patients into unnecessary insurance plans in order to maximize profits; (2) that the company was using AKF as a vehicle to facilitate these improper practices; (3) that, as a result, DaVita’s revenues and profits were illegally obtained; and (4) that DaVita lacked effective internal controls over financial reporting. The complaint further alleges that, as a result of the foregoing, the defendants’ statements about DaVita’s business, operations, and prospects were false and misleading and/or lacked a reasonable basis.
If you are a member of the class described above, you may no later than April 3, 2017 move the Court to serve as a lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of their choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP has not filed a complaint in this matter. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at firstname.lastname@example.org.
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