RADNOR, Pa.–(BUSINESS WIRE)–The law firm of Kessler Topaz Meltzer & Check, LLP reminds that an investor securities fraud class action lawsuit has been filed against iRhythm Technologies, Inc. (NASDAQ: IRTC) (“iRhythm”) on behalf of those who purchased or acquired iRhythm common stock between August 4, 2020 and January 28, 2021, inclusive (the “Class Period”).
Deadline Reminder: Investors who purchased or acquired iRhythm common stock during the Class Period may, no later than April 2, 2021, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or Adrienne Bell, Esq. (484) 270-1435; toll free at (844) 887-9500; via e-mail at firstname.lastname@example.org; or click https://www.ktmc.com/irhythm-technologies-inc-securities-class-action?utm_source=PR&utm_medium=link&utm_campaign=irhythm
According to the complaint, iRhythm is a digital healthcare company that offers a portfolio of ambulatory cardiac monitoring services on its platform called the Zio service. iRhythm receives revenue for its Zio service primarily from third-party payors, which includes commercial payors and government agencies, such as the U.S. Centers for Medicare and Medicaid Services (“CMS”). On August 3, 2020, the CMS issued its Calendar Year 2021 Medicare Physician Fee Schedule Proposed Rule, which would update payment policies, payment rates, and other provisions for services to be furnished under the Medicare Physician Fee Schedule on or after January 1, 2021.
The Class Period begins on August 4, 2020, when iRhythm held a conference call with analysts to discuss the CMS proposed rule. During this call, Kevin M. King (“King”), then President and CEO of iRhythm, discussed at length how iRhythm “worked hand-in-hand with the various governing bodies . . . in drafting and constructing” the language used in the CMS’s proposed rule, and that iRhythm was “well aware and well informed” of the proposed CMS rules. King praised the impact the proposed rule would have on iRhythm’s business and revenues, stating that “[i]f we were to apply the new codes and proposed rates, our 2019 revenues would increase slightly,” and that “our total business will be up slightly overall.”
However, the truth began to be revealed on December 1, 2020, when the CMS issued its final rule, which finalized the codes as anticipated, but did not finalize national pricing for certain products and services offered by iRhythm. On December 2, 2020, iRhythm’s common stock opened at $183.00 per share, down from the December 1, 2020 close of $240.64.
Then on January 29, 2021, Medicare Administrative Contractor, Novitas Solutions, published actual reimbursement rates under the CMS’s 2021 Medicare Physician Fee Schedule. A Baird analyst commented that these rates were “way lower than” the former codes, citing one example where iRhythm was previously reimbursed around $311, but was now receiving just $42.68. Following this news, the price of iRhythm’s common stock closed at $168.42 on January 29, 2021, down approximately 33% from its January 28, 2021 close of $251.00.
The complaint alleges that throughout the Class Period, the defendants misrepresented and/or failed to disclose to investors that: (1) iRhythm’s business would suffer as a result of the CMS’s rulemaking; (2) reimbursement rates would in fact plummet; (3) a lack of national pricing in the CMS rule and fee schedule would cause uncertainty and weakness in iRhythm’s business; and (4) as a result of the foregoing, the defendants’ public statements were materially false and misleading at all relevant times.
iRhythm investors may, no later than April 2, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.