BOCA RATON, Fla., Dec. 11, 2024 (GLOBE NEWSWIRE) -- Saxena White P.A. issues this notice to update and replace a prior press release issued by Saxena White on December 11, 2024. Plaintiff City of Fort Lauderdale Police and Firefighters’ Retirement System has filed a Notice of Scrivener’s Error with the United States District Court for the Middle District of Tennessee, which attaches a corrected Class Action complaint correcting a typographical error that inadvertently defined the Class Period as beginning on February 8, 2020, whereas the Class Action complaint alleges that the Class Period begins on February 28, 2020. The prior press release issued by Saxena White on December 11, 2024 contained the same typographical error. The Class Action asserts claims on behalf of all persons and entities that purchased or otherwise acquired Acadia Healthcare Company, Inc. securities between February 28, 2020 and October 30, 2024, inclusive. The full, updated press release follows:
Saxena White P.A. has filed a securities fraud class action lawsuit (the “Class Action”) in the United States District Court for the Middle District of Tennessee against Acadia Healthcare Company, Inc. (“Acadia Healthcare,” “Acadia,” or the “Company”) (NASDAQ: ACHC) and certain of its executive officers (collectively, “Defendants”). The Class Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder on behalf of all persons and entities that purchased or otherwise acquired Acadia Healthcare securities between February 28, 2020 and October 30, 2024, inclusive (the “Class Period”), and were damaged thereby (the “Class”). The Class Action filed by Saxena White is captioned City of Fort Lauderdale Police and Firefighters’ Retirement System v. Acadia Healthcare Company, Inc., et al., No. 24-cv-1447 (M.D. Tenn.).
The Class Action complaint expands the class period and allegations asserted in a related action against Acadia and certain of its executive officers captioned: Kachrodia v. Acadia Healthcare Company, Inc., et al., No. 24-cv-1238 (M.D. Tenn. filed Oct. 16, 2024) (the “Kachrodia Action”). Specifically, the Class Action expands the class period pled from February 28, 2020 to October 18, 2024 in the Kachrodia Action, to February 28, 2020 to October 30, 2024 in the Class Action.
Pursuant to the notice published on October 16, 2024 in connection with the filing of the Kachrodia Action, and as required by the Private Securities Litigation Reform Act of 1995 (PSLRA), investors wishing to serve as lead plaintiff are required to file a motion for appointment as lead plaintiff by no later than December 16, 2024. Saxena White’s filing of the Class Action does not alter the lead plaintiff deadline.
Based in Franklin, Tennessee, Acadia Healthcare purports to be the leading publicly traded pure-play provider of behavioral healthcare services in the United States. Acadia claims that it is committed to providing communities with high-quality, cost-effective behavioral healthcare services, while growing the Company’s business, increasing profitability, and creating long-term value for shareholders. Most of Acadia’s revenue comes from acute inpatient psychiatric facilities. Acadia receives payments from various payors, including states and the federal government under their respective Medicaid programs. Throughout the Class Period, Defendants touted the quality and safety of Acadia’s inpatient services and the Company’s strong financial performance driven by solid volumes and growth in patient days (i.e., length of stay) and same facility revenue. Defendants further touted strong revenue trends driven by rate increases across all payors and positive coverage and reimbursement trends from Medicaid, Acadia’s largest source of revenue.
The Class Action alleges that, during the Class Period, the Defendants made materially false and misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects, including that: (1) Acadia admitted patients and held them against their will and beyond the length of time that was medically necessary in order to deceive payors into continuing to pay for such patients’ care; (2) Acadia would not release patients until their insurance ran out; (3) in order to achieve the above, Acadia deployed Company assessors to pressure emergency rooms to send patients to Company facilities, filed frivolous petitions with courts to delay patients’ release, and directed employees to use buzzwords and avoid using other words in patients’ charts to create a false impression of patients’ mental state; (4) Acadia’s admissions, length of stay, and billing practices would subject the Company to government investigations and actions and heightened media scrutiny; (5) in light of such government investigations and actions and media scrutiny, Acadia’s relationships with its referral sources would be negatively impacted; (6) as a result of the above, Acadia experienced slower same-store patient volumes, and in turn, the Company would be forced to lower its full-year 2024 outlook; and (7) as a result of the above, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
On September 1, 2024, investors began to learn the truth about Acadia’s inpatient services when The New York Times (the “Times”) published an article, entitled “How a Leading Chain of Psychiatric Hospitals Traps Patients,” reporting that some of Acadia’s success “was built on a disturbing practice: Acadia has lured patients into its facilities and held them against their will, even when detaining them was not medically necessary.” On this news, the price of Acadia stock fell more than 4.5%, from a closing price of $81.93 per share on August 30, 2024, the prior trading day, to a closing price of $78.21 per share on September 3, 2024, the following trading day.
On September 26, 2024, the Times published another article, entitled “Acadia Hospitals Reach $20 Million Settlement With Justice Dept,” reporting that Acadia had agreed to a nearly $20 million settlement with the U.S. Department of Justice, related to an investigation into the Company’s practices of holding “patients for longer than necessary” at its facilities and admitting “people who didn’t need to be there.” On September 27, 2024, Acadia disclosed that it had received a request for information from the U.S. Attorney’s Office for the Southern District of New York and a grand jury subpoena from the U.S. District Court for the Western District of Missouri “related to its admissions, length of stay and billing practices.” On this news, the price of Acadia stock fell more than 16%, from a closing price of $75.66 per share on September 26, 2024, to a closing price of $63.28 per share on September 27, 2024.
On October 3, 2024, Acadia received a letter from Adam B. Schiff, Judy Chu, and Julia Brownley, members of the U.S. House of Representatives from California, seeking answers to questions raised by reports “that inpatient psychiatric facilities owned by Acadia Healthcare have wrongfully detained patients under medically unnecessary circumstances.” On this news, the price of Acadia stock fell more than 3.5%, from a closing price of $58.80 per share on October 2, 2024, to a closing price of $56.71 per share on October 3, 2024.
On October 18, 2024, the Times published another article entitled “Veterans Dept. Investigating Acadia Healthcare for Insurance Fraud,” reporting that the Veterans Affairs Department is investigating whether Acadia “is defrauding government health insurance programs by holding patients longer than is medically necessary” and “whether Acadia billed insurance programs for patients who were stable enough to be released and did not need intensive inpatient care.” On this news, the price of Acadia stock fell more than 12%, from a closing price of $59.32 per share on October 17, 2024, to a closing price of $52.03 per share on October 18, 2024.
The truth was fully revealed on October 30, 2024 when Acadia issued a press release announcing its financial results for the third quarter of 2024. In the press release, Acadia disclosed that it had lowered its full-year 2024 revenue outlook to a range of $3.15 to $3.165 billion and its full-year 2024 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to a range of $725 to $735 million. During the related earnings call held the next day on October 31, 2024, Chief Financial Officer (CFO) Heather Dixon disclosed that the lowered full-year 2024 guidance was in part due to slower same-store patient day growth of only 3% in the month of October, “which we believe is a result of the recent headlines and reporting in the media.” On this news, the price of Acadia stock fell $9.39 per share, or more than 18%, from a closing price of $52.08 per share on October 30, 2024, to a closing price of $42.69 per share on October 31, 2024.
If you purchased Acadia Healthcare securities during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as lead plaintiff. If you wish to apply to be lead plaintiff, a motion on your behalf must be filed with the U.S. District Court for the Middle District of Tennessee no later than December 16, 2024. The lead plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as lead plaintiff to share in any Class recovery in the Class Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member.
You may contact Marco A. Dueñas (mduenas@saxenawhite.com), a Senior Attorney at Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the Class Action. You also may retain counsel of your choice to represent you in the Class Action. You may obtain a copy of the Complaint and inquire about actively joining the Class Action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, California, and Delaware, is a leading national law firm focused on prosecuting securities class actions and other complex litigation on behalf of injured investors. Currently serving as lead counsel in numerous securities class actions nationwide, Saxena White has recovered billions of dollars on behalf of injured investors.
CONTACT INFORMATION
Marco A. Dueñas, Esq.
mduenas@saxenawhite.com
Saxena White P.A.
10 Bank Street, Suite 882
White Plains, New York 10606
Tel.: (914) 437-8551
Fax: (888) 631-3611
www.saxenawhite.com
