Now defunct, True Health Diagnostics was a blood-testing company which filed for bankruptcy protection. This company was accused of Medicare fraud in May 2017. It operates as a diagnostics company. The Company offers clinical laboratory testing services to identify, treat, and inhibit the development of diabetes, genetic disorders, cardiovascular diseases, and other metabolic conditions. True Health Diagnostics serves clients mainly in Richmond, Texas. It claimed that it had around 400 employees nationwide and served around 335,000 individuals every year. The company had to lay off some of its employees, most of whom were from Richmond, Texas.
Trouble for True Health Diagnostics began when it first got under the radar of federal government over Medicare reimbursements in the year 2017. Centers for Medicare & Medicaid Services further withheld the company’s 100% payments. It later reduced it to 35%. The company is in deep waters ever since. Because of this imposed stopping of funding, the company started its journey towards bankruptcy. It soon started laying off employees. Recently, the company laid off one-third of its employees because of a lack of funding as it is unable to pay the employees. The company struggled to find other funding options, as well. In June 2019, according to a lawsuit, the government agency increased the suspension of payments to 100% again based on fraudulent allegations. True Health Diagnostics challenged this in court and said that it never got a satisfactory opportunity to prove its innocence and contest the merits of this suspension. It also said that if this wasn’t lifted, the company would have to file for bankruptcy. The court dismissed this lawsuit on twenty-second July.
Christian Richards, the CFO of True Health Diagnostics, said that Medicare payments were the main source of revenue. As a result of this, True Health Diagnostics company filed for Chapter eleven bankruptcy protection in US Bankruptcy Court. According to this, the company will have to liquidate all its assets worth 10-50 million USD and liabilities worth 50-100 million USD and pay off all the loans and debts.