Credits - Reuters
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A well-known investment group called Blue Orca Capital says it believes something fishy might be going on with Nutex Health, a healthcare company. On Tuesday, Blue Orca announced it is betting that Nutex’s stock price will drop. The reason? They’re worried about how Nutex is handling its billing process.
According to Blue Orca, Nutex’s stock went up over 20 times in value after the company started using a new way to bill insurance companies. Instead of the usual method, Nutex began sending most of its patient bills through a process called arbitration, which is part of a law called the No Surprises Act. This law is supposed to stop patients from getting hit with unexpected medical bills, but companies can also use it to argue over payments.
To do this, Nutex uses a third-party company called HaloMD. Blue Orca says that HaloMD is run by someone who used to be an entertainer in Las Vegas and even appeared on reality TV. That alone raised some eyebrows, but there’s more. HaloMD has been mentioned in three different federal lawsuits. In those cases, HaloMD is accused of helping healthcare companies take millions of dollars from insurance providers in a dishonest way.
Even though Nutex is not named in any of those lawsuits, Blue Orca thinks the same kind of actions could be helping Nutex earn way more money per hospital visit than it used to. They warn that if Nutex is ever blocked from using the arbitration method or is forced to pay back the money it’s already received, the company could face lawsuits and lose a lot of value.
In short, Blue Orca believes Nutex’s recent success may not last, and if problems come to light, the company’s stock could fall quickly.