PRG-Schultz plunges on rejected Medicare contract

Shares of auditing company PRG-Schultz International Inc. plummeted Monday after the company said it failed to win an auditing contract from the federal Medicare program.

Medicare, which provides health coverage to seniors, is rolling out a national campaign aimed at recovering overpayments made to health care providers by the federal government. Auditing companies submitted competing bids to perform the work, which involves combing through medical bills in search of erroneous charges.

PRG-Schultz said Medicare officials explained the company did not receive a contract because it did not have the lowest bid for any of the four regions of the country.

Chief Executive James McCurry said the company will receive a briefing from Medicare before considering how to proceed.

"The company remains financially very strong, with over $20 million in cash on hand and a very profitable, very strong worldwide leadership position in accounts payable recovery audit," McCurry said.

Shares of PRG-Schultz International Inc. fell $3.90, or 47 percent, to $4.42.