The End Is Near for Another Clinical Laboratory Accused of Fraud: True Health Diagnostics
The End Is Near for Another Clinical Laboratory Accused of Fraud: True Health Diagnostics

Last week, court documents were unsealed in the Eastern District of Texas laying out serious allegations of fraud against True Health Diagnostics, LLC.  The documents arise from a failed attempt by True Health to lift a freeze on Medicare payments put in place against it based on suspicions of serious fraud.  The documents include the written Declaration of a Special Agent from the Office of Inspector General, United States Department of Health and Human Services.  According to the Special Agent, Jack Geren, True Health arose out of the ashes of another laboratory company called Health Diagnostic Laboratory, Inc. (“HDL”), which was “driven out of business as a result of pervasive healthcare fraud.”

The Declaration discloses that True Health has been under civil and criminal investigation since 2017, and that evidence uncovered in those investigations “suggests that [True Health], following its acquisition of HDL and hiring its former employees, engaged (and continues to engage) in criminal activity commonly referred to as:  payment of illegal remuneration, money laundering, billing for services not rendered, and billing for medically unnecessary services.”

The Declaration describes multiple pieces of evidence, including a message from one True Health executive to another in which he wrote that “this is all gonna make hdl look like child’s play.  [P]eople are gonna go to prison.”

According to the unsealed documents, based on this fraudulent conduct, Medicare has frozen over $20 million in payments to True Health.  Because of this freeze, True Health claims in the documents that bankruptcy is imminent.      

The schemes described in the documents are not unique, as the clinical laboratory industry continues to be a hotbed for Medicare and Medicaid fraud, as well as fraud and overbilling in connection with tests covered by private insurance.


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