Amedisys – The Most Vulnerable Name in Healthcare. What Gets Them First Medicare Advantage or the Department of Justice? Price Target $50
In 2008, Citron Research was the first to expose fraud at Amedisys, one of the leaders in home healthcare. The stock declined over 80% to $10 as the reports from Citron Research became the cornerstone of a Department of Justice lawsuit and a Senate Finance Committee investigation.
After settling lawsuits, paying enormous fines, and replacing management, Amedisys has been able to regain momentum in its stock by growing the loosely regulated hospice division to generate outsized margins and profits to compensate for the declining profitability of its legacy home health division.
ALL OF THAT IS ABOUT TO END AS THE COMPANY IS BACK TO ITS OLD TRICKS
In the past it took years for the Department of Justice to close loopholes and pull in the reigns on Amedisys. This time is different as the hurricane of Medicare Advantage is so strong that it will erode Amedisys margins and profitability faster than the DOJ can look into the business practices of their acquisitions.
When the government starts changing reimbursements in home healthcare and hospice and you are the leader in each industry, it is impossible to maintain that your business will not be affected. While the media has been overloaded with discussions of Medicare for All, the real story about Medicare that Amedisys shareholders should be most concerned about is the hurricane known as Medicare Advantage.
We believe recently enacted radical changes to reimbursement across all Amedisys divisions combined with a culture of fraudulent activities will send Amedisys shares down over 50% in the next 18 months.