Hospice company Odyssey HealthCare, Dallas, disclosed it is the subject of a Justice Department investigation and said its President and Chief Executive Officer David Gasmire had resigned for unrelated reasons. Odyssey said the investigation focuses on patient admissions, patient retention and billing practices from January 2000 to the present. With Gasmire's resignation, company founder and Chairman Richard Burnham returned to the position of CEO, which he held from 1995 to January 2004. In a news release, Burnham said, "We greatly appreciate and respect David's contributions to the company over the past eight years ... However, in light of the operational challenges we have experienced, all parties agreed that it was best to take quick action to put us back on a steady track." Odyssey operates 72 Medicare-certified hospice programs.
The company also lowered its forecast for 2004 earnings per share to between 94 cents and 96 cents from a previous estimate of $1.03 to $1.05. Its share price fell 47%, to $8.91, in trading on the NASDAQ stock exchange. Odyssey, scheduled to release its third-quarter results Nov. 1, earned $17.2 million on $171.5 million in revenue in the first half of 2004. The company went public in a $54 million offering in November 2001. -- by Joseph Mantone