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Texas firm accused of Medicare fraud files for bankruptcy

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RICHMOND, Va. (AP) — A blood-testing company filed for bankruptcy and says it’s cutting jobs because Medicare payments have been withheld over allegations of fraud.

The Richmond Times-Dispatch reports True Health Diagnostics LLC filed for Chapter 11 bankruptcy protection this week and notified officials of impending layoffs.

The letter says the suspension of all payments by the Centers for Medicare and Medicaid Services may cause additional layoffs “and/or a business shutdown.” It says nearly 400 jobs are affected nationwide. Nearly 30 of them are at a Virginia laboratory.

The company based in Frisco, Texas, filed a federal lawsuit this month, since dismissed, claiming fraud allegations led to $20 million worth of Medicare payments being withheld without due process since 2017.

The federal agency didn’t immediately respond to the newspaper’s request for comment.

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Information from: Richmond Times-Dispatch, http://www.richmond.com

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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