According to the lawsuit, throughout the Class Period, Defendants failed to disclose that: (a) PACS inflated its Medicare revenues by misclassifying lower-acuity patients as high-acuity patients that required skilled care in violation of a Covid-era waiver, thereby securing higher reimbursement rates; and (b) that after the expiration of the COVID-era waiver, PACS inflated its revenues by fraudulently billing for unnecessary treatments and for services never provided to patients.

On November 4, 2024, Hindenburg Research published a report alleging that, among other things, PACS misused COVID waivers to inflate Medicare reimbursements, as well as engaging in other revenue practices which misrepresented the Company’s financial health. On this news, PACS’ share price dropped $11.93 per share – 27.8 percent – to close at $31.01 per share on November 4, 2024.

Then, on November 6, 2024, the Company announced that it would delay the release of its third-quarter 2024 financial results due to an investigation by the Company’s Audit Committee into recent allegations concerning its reimbursement and referral practices. PACS also disclosed that it had received civil investigative demands from the federal government regarding these practices. On this news, PACS’ share price dropped $11.45 per share – 38.8 percent – to close at $18.09 per share on November 6, 2024.

Investors who purchased or acquired PACS securities between April 8, 2024 through November 21, 2024, may no later than January 13, 2025, seek to be appointed as a lead plaintiff representative of the class.