Another senior executive at HCA Holdings has booked a juicy profit on some of his stock options holdings. Senior Vice President Vic Campbell, who leads the hospital giant's government and investor relations group, last Friday exercised almost 37,000 options that would have expired next January before selling that many shares on the open market. His gains on those transactions totaled more than $2.6 million.
Campbell's sale came shortly after Jon Foster and Juan Vallarino last week booked combined profits of $3.5 million. Shares of HCA (Ticker: HCA) were changing hands late this morning at $78.81, up 1.4 percent. Year to date, they've climbed 7 percent.
Two HCA Holdings executives last week booked some profits on their stock options. A trading plan set up earlier this year by Jon Foster (pictured here), president of HCA's American group of 80 hospitals, was able to bank more than $2.3 million by exercising 36,000 options and then selling that number of shares for more than six times as much. In addition, Juan Vallarino, senior vice president of employer and payer engagement, exercised about 17,000 options that would have expired in mid-2019 and then sold the same number of shares. His profit on the transaction totals a little more than $1.2 million.
Shares of HCA (Ticker: HCA) are changing hands this morning at $77.12. They've risen 12 percent over the past three months and 5 percent year to date.
The Department of Justice and the owners of 16 hospitals have reached an agreement to settle False Claims Act allegations related to their use of intensive outpatient psychotherapy services from 2005 to 2013. The federal authorities claim the organizations didn't meet various requirements for Medicare billing.
Of the hospitals, 14 were under the banner of Health Management Associates until early last year and are now owned by Community Health Systems. A 15th hospital in Mississippi also is owned by CHS, while the last of the bunch is a 60-bed facility in North Texas. CHS will pay $210,000 for the Mississippi settlement while HMA's tab runs to $15 million.
“This case demonstrates that the U.S. Attorney’s Office for the Eastern District of Arkansas will aggressively pursue civil health care fraud cases, where the integrity of the Medicare system has been undermined,” said U.S. Attorney Christopher Thyer of the Eastern District of Arkansas. “Medical care providers who abuse Medicare hurt all taxpayers, and today’s announcement highlights our commitment to protecting our national health care system, as well as the Arkansans who depend on it.”
Read the full DOJ statement here.
Analysts at Leerink Partners and Avondale Partners have raised their price targets for HCA Holdings after the company's first-quarter earnings were in-line and the company announced plans to increase capital spending by $500 million.
Paula Torch at Avondale Partners increased her price target for the company to $90, and maintained her 'market outperform' rating.
"HCA's continued execution, expansion of service lines and access to the patient is driving strong revenue and margin expansion," Torch wrote in a report.
Ana Gupte at Leerink Partners raised her price target for HCA from $80 to $85 and also reiterated an 'outperform' rating.
"Our positive thesis is based on recently observed better than expected core growth and stronger ACA tailwinds of reduced bad debt and increased utilization from access expansion to the uninsured with Medicaid expansion and public exchanges," Gupte said in a report.
Shares of HCA (Ticker: HCA) rose 2.8 percent Thursday to $76.59. Year to date, they're up 4 percent.
HCA Holdings is headed back to the bond market in a big way. The Nashville-based hospital giant this morning said it plans to sell $1.6 billion in senior notes that will mature in 2025 and have an interest rate of 5.375 percent. Proceeds from the sale will redeem the $1.525 billion outstanding of HCA's 2021 notes, which have a 7.75 percent interest rate. No fewer than 12 investment banks, led by Citigroup and Barclays, are in on the deal.
SEE ALSO: Word from January of HCA's first big bond sale of this year
POSTDATA: WARRANTY DEEDS