On Friday we noted that shares of hospital chain Health Management Associates Inc. (HMA) fell after it revealed Thursday night that news magazine program ’60 Minutes’ was to air a negative segment about the firm.
Well today Health Management’s ’60 Minutes’ slump continued, with its stock down 5.7% to $7.50; it’s down 7.1% since Thursday’s close. In case you missed it (or want to watch it again) here’s the segment that seems to have done the damage.
To quote from host Steve Kroft in this video:
We talked to more than 100 current and former employees, and we heard a similar story over and over: that HMW relentlessly pressured its doctors to admit more and more patients — regardless of medical need — in order to increase revenues.
As one would expect, Health Management hit back claiming, among other things:
60 Minutes relied entirely on disgruntled former employees of the company and former contracted physicians, several of whom are seeking financial gain through active litigation with Health Management…Neither 60 Minutes nor the physicians interviewed identified any admission decision in which a physician’s medical judgment was overridden by an HMA executive, much less to defraud Medicare.
While investors seem to be voting with their feet, at least the analysts who cover the stock are standing by HMA. Per FactSet data, of the 18 analysts with ratings on the company only one has downgraded the stock, to Hold, since Thursday night. The stock still has a consensus Buy rating and a price target of $9.26 a share.
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