Company: Mednax, Inc.
A shareholder class action lawsuit has been filed against Mednax, Inc. (NYSE: MD) (“Mednax” or the “Company”) on behalf of purchasers of the Company’s securities between February 4, 2016 and July 27, 2017, inclusive (the “Class Period”).
Mednax is a health care administration business that acquires and administers physician practice groups. During the Class Period, Mednax’s business model depended upon growth from the acquisition of new practice groups, primarily in anesthesiology.
The class action complaint alleges that defendants made false and misleading statements and/or failed to disclose to investors during the Class Period that the Company’s business model relied on the practice of acquiring anesthesiology practice groups and then suppressing physician compensation expenses. The complaint further alleges that Mednax’s practice of underpaying anesthesiologists hindered its ability to retain these physicians once their post-acquisition contracts expired, which led Mednax to threaten enforcement of highly restrictive non-compete agreements that would cause many physicians to unwillingly renew their agreements.
On July 28, 2017, Mednax disclosed, during its second quarter earnings call with investors and analysts, that the Company had failed to complete any acquisitions of anesthesiologist practices during the reporting quarter. Significantly, the Company also disclosed that future anesthesiologist acquisitions were unlikely, which it attributed to the “challenging” payor mix combined with “continued… growth in compensation expense for nurse anesthetists.”
Mednax stockholders who purchased shares of the Company’s stock prior to July 27, 2017 are encouraged to contact the firm to discuss their legal rights and potential recovery options.