Pathology lab files for bankruptcy after settling false billing suit

Bostwick Laboratories, an anatomic pathology laboratory based in Glen Allen, Va., filed for Chapter 11 bankruptcy on Wednesday, according to the Richmond Times-Dispatch.

In its bankruptcy petition, the lab listed its assets as between $1 million and $10 million and its liabilities as between $50 million and $100 million, according to the report.

The lab filed for bankruptcy two days after telling employees the company was being sold to Poplar Healthcare, a lab services company based in Memphis, Tenn.

Bostwick Laboratories said in its bankruptcy petition that it has between 200 and 999 creditors. The company's largest unsecured creditor is the Department of Justice, which has a $2.7 million claim, according to the report.

The DOJ's claim in the bankruptcy case dates back to August 2014, when Bostwick Laboratories agreed to pay the federal government more than $6.5 million to resolve allegations that it violated the False Claims Act and the Anti-Kickback Statute by billing Medicare and Medicaid for medically unnecessary cancer detection tests and offering physicians incentives to obtain government payer business, according to the Department of Justice.

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