NEW YORK, March 28, 2024 /PRNewswire/ — Attorney Advertising — Bronstein, Gewirtz & Grossman, LLC, a nationally recognized law firm, notifies investors that a class action lawsuit has been filed against agilon health, inc. (“agilon” or “the Company”) (NYSE: AGL) and certain of its officers.
Class Definition:
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired agilon securities: (1) between January 9, 2023, and January 4, 2024, both dates inclusive (the “Class Period”); or (2) pursuant to the materials issued in connection with the Company’s secondary public offering (“SPO”) on or about May 16, 2023. Such investors are encouraged to join this case by visiting the firm’s site: bgandg.com/AGL.
Case Details:
According to the Complaint, agilon, headquartered in Austin, Texas, generates profits from reducing medical expenditures. By partnering primarily with Medicare Advantage (“MA”) plans as well as traditional Medicare and commercial managed care organizations, agilon receives a fixed monthly payment from payers for each patient under its care. In return, agilon takes on the responsibility of managing the total cost and quality of care for those patients. This model incentivizes agilon and its contracted physician partners to focus on preventive care and improve health outcomes in order to control costs. If the total cost of caring for patients is less than the fixed payments agilon receives, it realizes a profit. However, if costs exceed the payments, agilon incurs a loss. This aspect of financial risk is inherent in agilon’s business model.
Having clear visibility into utilization trends over time is critical for agilon. The Company’s business model relies on analyzing this data to develop evidence-based care plans and coordinate patient care with its partner physicians. agilon claims to track patient healthcare utilization on an ongoing basis, allowing its teams to actively manage costs and quality of care. The ability to forecast utilization accurately and adjust clinical programs accordingly is key to agilon’s goal of reducing expenses in order to produce profits.
The Complaint alleges that throughout the Class Period and in the SPO Materials, Defendants misled investors about agilon’s medical costs by:
(1) touting the Company’s purported visibility into utilization trends and medical costs;
(2) failing to disclose increased medical costs that agilon had incurred prior to and during the Class Period due to higher utilization of healthcare by MA patients;
(3) falsely stating that its incurred-but-not-reported (IBNR) Reserve was adequate;
(4) making false and misleading statements about the effectiveness of its business model;
(5) issuing overly optimistic financial guidance; and
(6) issuing risk disclosures that were materially false and misleading because they characterized adverse facts that had already materialized as mere possibilities.
As a result of these materially false and misleading statements and omissions, the Complaint further alleges, agilon stock traded at artificially high prices during the Class Period as investors were conditioned to believe that the Company’s medical cost expenses were lower than represented. In May 2023, Defendants took advantage and profited enormously by selling hundreds of millions worth of their agilon stock through the SPO at the inflated price of $21.50 per share.
The truth about the higher medical costs that agilon had been facing began to emerge on November 2, 2023, according to the Complaint. On that date, agilon reported lower-than-expected third quarter 2023 results due to increased utilization and medical costs. Defendants also lowered the Company’s 2023 full-year revenue outlook and informed investors that agilon had increased its IBNR Reserve to account for prior period medical expenses. These results caught analysts off guard.
On this news, agilon’s stock price fell $2.23, or 13.2 percent, to close at $14.66 on November 3, 2023.
Then, on January 5, 2024, agilon surprised investors again by lowering its 2023 profit forecasts. Specifically, the Company reduced its 2023 Medical Margin and Adjusted EBITDA guidance, citing high-than-expected medical costs. Specifically, agilon reduced its 2023 Medical Margin and Adjusted EBITDA outlooks by more than $110 million and $73 million, respectively.
On this news, agilon’s stock fell $3.45, or 28.6 percent, to close at $8.63 on January 5, 2024.
What’s Next?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm’s site: bgandg.com/AGL or you may contact Peretz Bronstein, Esq. or his Law Clerk and Client Relations Manager, Yael Nathanson of Bronstein, Gewirtz & Grossman, LLC at 332-239-2660. If you suffered a loss in agilon you have until May 20, 2024, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff.
There is No Cost to You
We represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys’ fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman:
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide.
Attorney advertising. Prior results do not guarantee similar outcomes.
Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Nathanson
332-239-2660 | [email protected]
SOURCE Bronstein, Gewirtz & Grossman, LLC
