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agilon health, inc.

Case Details

Class Period: January 9, 2023 - January 4, 2024
Date Filed: March 19, 2024
Case Number: 1:24-cv-00297
Jurisdiction: Western District of Texas
icon-casetype Case Type: Securities Case
Days Left to
Seek Plaintiff:
27

Case Summary

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.

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 accounting reserves for higher-than-expected medical costs were 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.

The truth about the higher medical costs that agilon had been facing began to emerge on November 2, 2023. 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 accounting reserve for prior period medical expenses. 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. agilon also announced that its Chief Financial Officer, Timothy Bensley would retire and be replaced later in the year. On this news, agilon’s stock fell $3.45, or 28.6 percent, to close at $8.63 on January 5, 2024.

Documents
Complaint