In July Gentiva Health Services Inc received a subpoena from the U.S. Securities and Exchange Commission (SEC). Meanwhile the investigation on behalf of current long term investors of Gentiva Health Services, Inc. (NASDAQ:GTIV) over potential breaches of fiduciary duty by certain officers and directors at Gentiva Health Services in connection with its Medicare reimbursement practices continues.

The investigation by a law firm on behalf of current long term investors in Gentiva Health Services, Inc. (NASDAQ:GTIV) concerns allegations that Gentiva Health Services has been taking advantage of the Medicare reimbursement system by increasing the number of in-home therapy visits to their clients, some of which were allegedly not medically necessary in order to meet payment escalators under previous Medicare rules.

On April 26, 2010 The Wall Street Journal published an article entitled Home Care Yields Medicare Bounty. The Wall Street Journal reported that an analysis by the Wall Street Journal of Medicare payments to home health-care companies in recent years raised questions about whether some companies, including Gentiva Health Services Inc, are taking advantage of the Medicare reimbursement system. The article stated that [t]he results show that the number of in-home therapy visits tracks Medicare financial incentives. According to the WSJ article, the percentage of Gentiva Health Services patients receiving 10 visits dropped by 27% from 2007 to 2008, when the 10 visit reimbursement bonus was eliminated from Medicare in January 2008

On May 12, 2010, the United States Senate Finance Committee requested information from Gentiva Health Services, Inc regarding its Medicare utilization rates and amount of therapy services furnished to each beneficiary. On May 26, 2010 the Senate Finance Committee requested supplemental information relating to Gentiva Health Services compliance program, policies and procedures and billing manuals.

Then on July 13, 2010, the SEC informed Gentiva Health Services that it has commenced an investigation relating to its participation in the Medicare Home Health Prospective Payment System and, on July 16, 2010, Gentiva Health Services received a subpoena from the SEC requesting certain documents in connection with its investigation.