CVS - CVS ALERT: Bragar Eagel & Squire P.C. Announces that a Class Action Lawsuit Has Been Filed Against CVS Health Corporation and Encourages Investors to Contact the Firm | Benzinga
NEW YORK, July 17, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against CVS Health Corporation ("CVS" or the "Company") (NYSE:CVS) in the United States District Court for the Southern District of New York on behalf of all persons and entities who purchased or otherwise acquired CVS securities between May 3, 2023 and April 30, 2024, both dates inclusive (the "Class Period"). Investors have until September 10, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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CVS is a healthcare company that operates through three primary segments: Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness. The Health Care Benefits segment purportedly offers "a broad range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare Supplement plans, [prescription drug plans] and Medicaid health care management services." The Health Care Benefits segment's revenues consist almost entirely of insurance premiums paid by customers.
The pricing and other terms of the Company's private health insurance plans are typically determined in advance of a plan's policy period, which is typically one year. CVS determines premiums for these plans based on internal forecasts that consider historical data and the profitability of which are dependent on the Company's ability to accurately model, among other things, medical cost trends and health care utilization patterns. Generally, a fixed premium rate is determined at the beginning of the policy period. To the extent that unmodeled-for increases in the costs of health care and other benefits arise during a given policy period, CVS is ultimately responsible for the payment of those costs. Accordingly, the profitability of the Health Care Benefits segment is particularly sensitive to the accuracy of its cost forecasts.
The Complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the forecasts CVS used to determine plan premiums were ineffective at accounting for medical cost trends and health care utilization patterns; (ii) as a result, CVS was ...