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Aveanna Gives Management $15 Million Bonus Amid Federal Fraud Probe

Retention bonus awarded just prior to allegations healthcare firm billed Medicare for unnecessary hospice services.

April 1, 2024

With shares up more than 150% over the past year Aveanna Healthcare Holdings Inc, (AVAH), a provider of in home pediatric and adult healthcare services, believes management needs an extra incentive to stick around.

The company’s Board recently approved a senior management retention plan that aims to award executives $15 million if certain revenue and Adjusted EBITDA targets are met by June 30, 2026.

Aveanna recognized $2.8 million in expense from the initiative in 2023, according to the company’s latest annual report.

The award was granted just before Aveanna received a civil investigative demand (CID) accusing it of fraud in its hospice unit. The company revealed the CID requested documents and information pertaining to the company’s Comfort Care Hospice subsidiary in Alabama.

The Department of Justice (DOJ) is investigating allegations of:

“...improper submission of claims to Medicare and other federal healthcare programs for service to patients who were ineligible or not properly certified for said healthcare services and…improper remuneration to medical directors and skilled nursing facilities for patient referrals in violation of certain federal regulations.”

Aveanna says a “loss event” is not probable and that the matter will not materially impact the business.

It did not record an accrual for the matter.

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