Veradigma data-driven healthcare technology company, announced it acquired revenue cycle optimization platform Koha Health on the same day, law firm Robbins Geller Rudman & Dowd LLP announcement she filed a class-action lawsuit against the health tech company on behalf of its investors.
The class action lawsuit was filed against Veradigm on behalf of purchasers of the Company’s common stock between February 26, 2021 and June 13, 2023.
The suit alleges that Veradigm and certain of its current and former executives violated the Securities Exchange Act of 1934, alleging that the defendants overstated the company’s historical revenues by at least $20 million, artificially inflating its revenues by recording duplicate transactions for more than two years, inflated its profits and margins, failed to maintain controls over its financial reporting, and failed to comply with generally accepted accounting principles regarding revenue recognition practices.
Buyers of the company’s stock have until January 22 to join the class action.
“On February 28, 2023, Veradigm announced that it had “detected certain internal control deficiencies related to revenue recognition that occurred during the preceding six quarters, resulting in inaccuracy in the revenue reported during those periods.” Veradigm revealed that tax filing errors caused revenue to be overstated by approximately $20 million between the third quarter of 2021 and the fourth quarter of 2022. Following this news, Veradigm’s stock price fell by nearly 13%,” the law firm said in a statement.
“Then, on June 13, 2023, Veradigm disclosed that it had identified additional revenue misstatements dating back to fiscal year 2020. Veradigm further disclosed that its internal review into the nature and extent of accounting and internal control errors would take longer than previously anticipated, and Veradigm’s independent auditors required additional time to complete their audit procedures. As a result, Veradigm was unable to meet the deadline to file its annual report on form 10-K. Following this news, Veradigm’s stock price fell more than 4%.”
Chicago-based Veradigm provides technology to biopharmaceutical companies, health plans and payers, and healthcare providers, including data solutions, electronic health records, patient engagement tools and revenue cycle services.
Koha Health, the company the company announced its acquisition, provides strategic consulting services focused on improving the financial health of healthcare providers through revenue cycle management.
“Today’s announcement represents an exciting opportunity for Veradigm to expand its revenue cycle services portfolio by leveraging additional capabilities and subject matter expertise to better meet market needs,” said Tom Langan, president and chief commercial officer of Veradigm, in a statement.
Veradigm will add Koha’s revenue cycle management services to its specialty offerings in musculoskeletal medicine.
The company did not refer to the class action in its report. announcement regarding the acquisition.
