Class action filed against AdaptHealth

PLYMOUTH MEETING, Pa. – A class action lawsuit has been filed against AdaptHealth alleging the company misrepresented the strength of its diabetes business, causing investors to pay inflated prices for shares in the company. 

The lawsuit, filed Oct. 24 in the United States District Court for the Eastern District of Pennsylvania by the Allegheny County Employees Retirement System, alleges that between Aug. 4, 2020, and Feb. 27, 2023, AdaptHealth and certain senior executives overcharged CMS and other insurance providers by submitting improper billing codes for diabetes equipment and that the company and certain senior executives made numerous false and misleading statements to investors during the period. 

In 2021, for example, materials and documents associated with a secondary public offering of shares allegedly contained untrue statements of material fact and omitted to state material facts that were required by applicable law and necessary to make the statements therein not misleading. As a result, AdaptHealth common stock traded at artificially inflated prices during the period, according to the lawsuit. 

AdaptHealth’s alleged misconduct came to light Feb. 27, 2023, when the company announced a surprise loss of $0.02 per share for the fourth quarter of 2022, which was significantly lower than the gain of $0.27 per share that analysts and investors were led to expect. The company also reduced its guidance for 2023, lowering revenue expectations by more than 1.5%. AdaptHealth attributed the miss and lowered guidance to “tempered expectations on diabetes.” As a result, the price of the company’s common stock declined precipitously. 

Named in the complaint are Luke McGee, Josh Parnes, Stephen Griggs, Jason Clemens, Frank Mullen, Richard Barasch and several other executives, along with several financial firms, including Deutsche Bank, Jefferies, BOFA Securities and Truist Securities. 

The lawsuit seeks compensatory damages and reasonable costs and expenses incurred in the action, including attorney fees and expert fees.