NEW YORK, Aug. 01, 2024 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a securities class action lawsuit has been filed in the United States District Court for the District of Delaware on behalf of all persons and entities who purchased securities of Humana Inc. (“Humana” or the “Company”) (NYSE: HUM) between July 27, 2022 and January 24, 2024, inclusive (the “Class Period”).
The Complaint in the lawsuit alleges that Defendants made false and/or misleading statements and/or failed to disclose that Defendants downplayed pressures on Humana’s adjusted earnings-per-share resulting from increased medical costs associated with pent-up demand for healthcare procedures (especially as COVID concerns abated) which, contrary to Humana’s assurances, resulted in increased utilization rates and costs.
The Complaint further alleges that on June 13, 2023, UnitedHealth Group Inc. (“UnitedHealth”), one of Humana’s principal health insurer competitors, revealed that it was seeing “higher levels” of outpatient care activity and suggested that this higher utilization was due to “pent-up demand or delayed demand being satisfied.” The Complaint alleges that UnitedHealth further revealed that it was “seeing very strong volumes” in certain areas, including ambulatory surgery, and an overall “higher number of cases that are being performed.”
The Complaint also alleges that given the similarities in Humana’s and UnitedHealth’s businesses, and the likelihood that Humana would also suffer increased utilization and costs due to pent-up demand, the price of Humana common stock declined $57.63 per share, or more than 11%, from a close of $512.63 per share on June 13, 2023, to close at $455.00 per share on June 14, 2023.
The Complaint further alleges that just three days later, on June 16, 2023, Humana confirmed investors’ fears when it reported “higher than anticipated non-inpatient utilization trends, predominately in the categories of emergency room, outpatient surgeries, and dental services, as well as inpatient trends that have been stronger than anticipated in recent weeks, diverging from historical seasonality patterns.” The Complaint alleges that although the Company re-affirmed its full year insurance segment benefits expense ratio guidance of between 86.3% and 87.3%, given the increased utilization rates, Humana informed investors that it “now expects to be at the top end of this full year range”—revealing a less profitable claims environment. The Complaint also alleges that the Company also revealed that it “assume[d] it will continue to experience moderately higher-than-expected trends for the remainder of the year” and that the Company had already considered the increased utilization rates in connection with bids it submitted to CMS in connection with the 2024 Medicare Advantage program eleven days prior, on June 5, 2023.
The Complaint alleges that in response to this announcement, the price of Humana common stock fell $35.78 per share, or approximately 8%, from a close of $447.76 per share on January 17, 2024, to close at $411.98 per share on January 18, 2024.
Finally, on January 25, 2024, the Complaint alleges that Humana further shocked the market when it announced a loss of $4.42 per share (adjusted loss per share of $0.11) for the fourth quarter of 2023 that was “driven by higher than anticipated inpatient utilization . . . and a further increase in non-inpatient trends,” and stated that it expected the higher level of medical costs would “persist throughout 2024.” The Complaint alleges that as a result, Humana revealed that it expected 2024 adjusted EPS of only $16 per share (a $10 per share decrease from 2023 and well below analysts’ expectations of $29 per share).
Investors who purchased or otherwise acquired shares of Humana should contact the Firm prior to the August 2, 2024 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
Please visit our website at http://www.gme-law.com for more information about the firm.
