Amedisys (AMED - Snapshot Report), one of the leading US players in the home health and hospice segment, has more trouble with the Department of Justice beginning investigations against the company. Several important documents and information related to the company’s business related to reimbursement and billing claims to Medicare are being investigated.

Amedisys has stated that it will cooperate during the investigation. Following the announcement of investigation, shares of the company plunged more than 15% on Tuesday (though they have recovered about 20 cents per share Wednesday).

Amedisys and some other home healthcare providers are currently being investigated by the Senate Finance Committee for allegedly abusing Medicare rules. The investigations are being conducted to check if these companies deliberately increased the number of patient visits to receive higher Medicare reimbursements.

In addition, Amedisys is also being investigated by the Securities and Exchange Commission (SEC). The company has received a subpoena from the SEC for documents associated with the investigation by the Senate Finance Committee.

Home health services treat sick patients in their homes, which save money by avoiding costly hospitalization. Services include programs for chronic conditions and various diseases such as diabetes, coronary artery disease, congestive heart failure and complex wound care, chronic obstructive pulmonary disease, geriatric surgical recovery, behavioral health and stroke recovery, as well as various rehabilitative programs. Amedisys also provides hospice services to patients.

Last week, Amedisys announced a restructuring program under which some home health and hospice agencies were closed and some were consolidated. Moreover, its start-up plans were also lowered. The company now expects to open 5-10 start-up home health agencies, way below the earlier expectation of 40.

Along with the second quarter results, Amedisys provided guidance for 2010, an EPS of $4.20–$4.50 on revenues of $1.63–$1.65 billion. Earlier, in July 2010, the company had suspended its full-year guidance provided in April, which was EPS of $5.50–$5.70 on revenues of $1.70–$1.75 billion.