Envision Healthcare Facing Securities Lawsuit After NYT Report on ‘Surprise Billing’

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A proposed federal securities class action has been filed in Tennessee on behalf of all individuals who purchased or otherwise acquired Envision Healthcare Corporation securities between March 2, 2015 and July 21, 2017. The complaint, filed against Envision and four of its top officers, alleges the defendants issued materially false and misleading statements regarding the company’s “business, operational and compliance policies” in violation of federal securities laws. Namely, the case claims Envision failed to disclose that:

One of its operating subsidiaries, EmCare Holdings, Inc., routinely arranged for patients looking for treatment at in-network facilities to be treated by out-of-network doctors;
Consequently, EmCare billed these patients at higher rates than if they’d received treatment in-network;
Envision attributed EmCare’s growth during the previously mentioned time period to “other factors” the case says are false and/or misleading; and that
Envision’s revenue growth, as a result of its allegedly unconscionable patient referral methods, would likely be unsustainable once such conduct came to light.

And come to light it did. According to the complaint, the New York Times on July 24 reported that hospitals connected to Envision’s EmCare subsidiary were “disproportionately likely to engage in ‘surprise billing,’ in which patients who sought treatment at in-network facilities were treated by out-of-network physicians and subsequently billed at higher rates.”

Upon this news, the case continues, Envision’s stock prices fell $2.33, or 3.72 percent per share.