According to the Complaint, Oak Street Health, Inc. operates primary care centers within the United States. Oak Street claims that it “engages Medicare eligible patients through the use of an innovative community outreach approach.” The Company claims it contracts with health plans to generate medical costs savings and realize a return on its investment in primary care. As of December 31, 2020, the Oak Street claims to have operated 79 centers in 16 markets across 11 states, which provided care for approximately 97,000 patients.
The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Complaint alleges Defendants failed to disclose to investors: (1) that Oak Street maintained relationships with third-party marketing agents likely to provoke law enforcement scrutiny; (2) that Oak Street was providing free transportation to federal health care beneficiaries in a manner that would provoke law enforcement scrutiny; (3) that these activities may be violations of the False Claims Act; (4) that, as such, Oak Street was at heightened risk of investigation by the DOJ and/or other federal law enforcement agencies; (5) that, as a result, Oak Street was subject to adverse impacts related to defense and settlement costs and diversion of management resources; and (6) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.