Health Management Associates Inc. (NYSE: HMA) is among the worst performers today. Shares of the company tanked on news that its general counsel Timothy Parry has suddenly resigned after a overbilling in Medicare lawsuit against the hospital operator. To add insult to injury, the disclosure was made today and the report is that he was leaving last week.
Is this even possible? Health Management noted that this resignation was for personal reasons,but this is after a whistle-blower suit from a former employee alleging that he terminated after reporting Medicare overbilling procedures.
Health Management’s guidance was just put at $0.25 to $0.26 EPS versus consensus estimates of about $0.20 or $0.21 EPS, but sales for 2012 were guided light at $6.3 billion to $6.5 billion versus Thomson Reuters estimates of $6.54 billion.
To show just how bad this is and to outline how concerned Wall Street is over whistleblower lawsuits like this, HMA shares are down 19% at $5.63 versus a prior 52-week trading range of $6.06 to $11.74.
JON C. OGG
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