Short-seller Jim Chanos chid CNBC on Thursday that he’s taken positions against health-care trade ins Envision Healthcare and Mednax.
“I’m betting these companies might be merit nothing,” the founder of Kynikos Associates told CNBC’s “Squawk Box.” “They are not settle close to profitable.”
He said he’s been short Envision Healthcare since the halfway point of last year and Mednax as of this year.
Both stocks dumped after the announcement. Nashville-based Envision, which has a market cap of $4.6 billion, was down 3 percent and Mednax skidded 4.9 percent. Both regained zone from even deeper drops during the premarket.
Chanos, conscious for his big bet against Enron before it collapsed in 2001, said Thursday his unchanging has been concerned about the “rent seekers” in the U.S. health-care system who he says are ripping off the system. Envision Healthcare and Mednax business models cover “deception or aggressive use of reimbursement,” Chanos claimed.
The Kynikos president also tributed UnitedHealthcare’s terminated agreement with Envision Healthcare after UnitedHealthcare assumed that Envision had significantly over-billed patients for its services, particularly in crisis rooms. Envision has blamed insurance companies.
“You go the emergency room, you sprain your ankle and you get two tabulations — one from the hospital and a separate one from the emergency room,” Chanos state. UnitedHealthcare created a website targeting the company’s billing practices.
One at a time, the Centers for Medicare and Medicaid Services on Tuesday proposed hospitals drink more transparency and publicly list their standard charges on the web. The Affordable Take charge of Act, also known as Obamacare, mandates publishing charges, but the provision hasn’t been forced.
As for Mednax, Chanos said he doesn’t like the way the company is accounting for pacts with health-care providers.
“Both companies have put themselves up for tag sale hoping that private equity will buy them out,” he added. “Winter is finish in the money b be in the U.S. health-care system.”
Envision Healthcare and Mednax did not immediately respond to CNBC’s applications for comment.
Kynikos Associates, with more than $2 billion in assets controlled by management, saw its short-only fund down 12 percent last year, according to begetters familiar with the matter. Kynikos’ hedge fund was up 22 percent newest year, sources said, adding both funds are about uncompromisingly in 2018.