Grizzly Research short GeneDx, says ‘actively committing widespread fraud’

Grizzly Research is short GeneDx (WGS), saying insiders attest that the company is “actively committing widespread fraud.” In a recently published report, Grizzly said that, “We believe the company’s growth is largely an illusion, driven by fraudulent schemes and illegal tactics deliberately aimed at exploiting Medicaid and Medicare systems to artificially inflate revenue. Testimonies from former employees and ongoing litigation suggest that GeneDx has inflated its revenue through an illegal practice known as ‘code stacking.’ This tactic enables the company to bill insurance providers for services that do not meet the required criteria. Code stacking is prohibited since 2013… We anticipate that Medicare, Medicaid, and other health insurers will seek to recover overpayments made to GeneDx due to illegal code-stacking practices.” In morning trading, shares of GeneDx have gained about 2% to $73.25.