OCTOBER 2, 2019 — LAYOFFS CONTINUE WITH CLOSURE LIKELY BY THE END OF THE YEAR
According to the company, only employees who are assisting in the sale of assets will remain at the Richmond, Virginia lab in the coming weeks.
According to comments by Clifford Zucker, functioning as True Health’s restructuring official, “A number of them are being kept on for a while to help liquidate various assets, like equipment, and to collect receivables. We are trying to monetize everything. We will keep those employees on as long as we can. We are still formulating the plan, but the plan is to keep a bunch of people on during October and through November. By the end of the year, there will be probably a handful employees remaining — or none.”
Frisco, Texas-based True Health Diagnostics, a provider of clinical laboratory services, is embroiled in a battle with Medicare over at least $20 million in disputed claims withheld by CMS. As a result of impaired cash flow, the company filed for Chapter 11 bankruptcy protection and is preparing to lay off 399 employees at its Richmond, Virginia laboratory facility. According to Christian Richards, CFO of True Health, "Medicare payments are a significant source of revenue for the company, and without these payments the company must commence employee layoffs and may need to commence additional employee layoffs and/or a business shutdown.” It is anticipated that unless additional funding is found or a white-knight appears, the laboratory may complete its layoffs and shutdown by September 27, 2019.
The company filed a lawsuit against the government, claiming it was not provided with due process and the opportunity to challenge what Medicare claims are “credible allegations of fraud. The lawsuit was dismissed by a federal court, leaving any attempt to recover money from a settlement with Medicare moot.
True Health acquired a large portion of the assets of Richmond, Virginia-based Health Diagnostic Laboratory in 2015 from a bankruptcy court asset auction.
HDL was embroiled in what has been described in published reports as a scam. The cornerstone of that scam was to supply patients with testing, but agreeing never to collect their co-pay, rendering their services to the patient for “free.” Physicians also participated by billing for the collection and handling of the blood samples and receiving kickbacks on sales. For those wanting to read the fascinating HDL story, it can be found here. True Health is mentioned in part two of the story.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?