Home health provider LHC Group, of Lafayette, lost $38 million, or $2.08 per share, in the third quarter with most of that caused by the $65 million it cost to settle a federal whistleblower lawsuit involving the company’s Medicare billing practices.
LHC said its earnings also were affected by an unexpected $2.3 million increase in self-insured employee health-care costs. That expense was partly offset by pay-for-performance revenue that added $715,000 in after-tax earnings.
LHC’s revenue dipped to $153.4 million, compared to $165.7 million a year ago.
The results were in line with LHC’s earlier estimate of a per-share loss between $2.10 and $2.25, depending on the final tax treatment of the whistleblower suit settlement.
In the lawsuit filed in federal court in Lafayette, the U.S. Justice Department alleged that between 2006 and 2008 LHC improperly billed for medically unnecessary services and for services to patients who were not homebound.
In settling the lawsuit, LHC said it disputed those allegations and didn’t admit to any wrongdoing. The company said it settled, in part, to avoid the cost of a years-long legal with the federal government, which regulates LHC and also pays for most of the home health services the company provides to elderly and disabled patients.
LHC reiterated its Oct. 26 projection of a 2011 per-share loss in the range of 72 cents to 82 cents. The company said the forecast does not include the proposed 2012 Medicare payments for home health services. The federal agency has proposed cutting payments overall by 2.3 percent. LHC estimates the lower payments could lower fourth-quarter revenue by $1.2 million and earnings by 4 cents per share.
LHC shares closed Wednesday at $15.34, down 4 cents.