Accusations of Medicare overbilling sent practice management company AmeriPath's stock reeling last month, but the pathology PPM rebounded a few weeks later when the charges were withdrawn.
On Dec. 10, AmeriPath said it no longer had to refund $2.95 million to Medicare, which had accused the company of overbilling at its Fort Lauderdale, Fla., clinic in 1996. On Nov. 23, the company said Medicare had ordered the refund because of errors in billing codes and failure to provide requested documents.
Medicare rescinded its charges after AmeriPath presented data showing the billing code errors were Medicare mistakes.
"It's been a very trying period for everyone at AmeriPath," says Robert Wynn, the Riviera Beach, Fla.-based company's chief financial officer and executive vice president.
He adds that the company won't take action against Medicare, but it is seeking the withdrawal or dismissal of at least five shareholder cases, filed in U.S. District Court in Miami after the stock crash. "Medicare at least had a valid thought in their mind for what they did," Wynn says. "These slip-and-fall attorneys are looking at the stock prices and firing off lawsuits."
The original announcement sent AmeriPath stock sliding from $9.09 to its all-time low of $3.88 before recovering to close at $5 on Nov. 24.
Analysts downgraded AmeriPath, believing the company could lose millions of dollars in revenues annually if it had to adjust its coding among all its 220 physicians to reflect the Fort Lauderdale case.
But one analyst, Hambrecht & Quist's Robert Lunbeck, reversed his stance Dec. 7. Lunbeck said the company told him officials had acknowledged Medicare might have erred in asking for a refund. Wynn says it appears Medicare used an outdated coding book when checking AmeriPath's billing records.
The news buoyed the company's stock price. On Dec. 11, the first trading day after the Medicare reversal, AmeriPath's stock moved up more than $3 to $10.06.