Texas blood-testing company files for bankruptcy, plans to cut 392 jobs

True Health Diagnostics, a blood-testing company based in Texas, filed for Chapter 11 bankruptcy protection July 30 and plans to lay off 392 employees, according to the Richmond Times-Dispatch

The blood-testing company has been in a dispute with the federal government over Medicare reimbursement. The company filed a lawsuit July 2, since dismissed, claiming that CMS withheld $20 million in payments to the company since 2017 without due process. 

The Medicare payments have been withheld from True Health over allegations of fraud, according to the report.

True Health Diagnostics said that the suspension of Medicare payments to the company is the reason for the layoffs. It also warned that the company may have to shut down operations entirely.

"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," True Health's CFO Christian Richards wrote in a letter to the Virginia Employment Commission, according to The Times-Dispatch. 

True Health estimates its assets to be $10 million to $50 million and its liabilities to be $100 to $500 million.

Read the full report here.

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