A federal bankruptcy judge has approved the sale for $37.1 million of the once high-flying Health Diagnostics Laboratory to a new lab company, True Health Diagnostics. True Health has a business model that mimic’s HDL’s and is owned by some of the same players who helped create and who owned HDL.
Health Diagnostic Laboratory (HDL) was started in 2009. By 2012 the company had revenue of $417 million, $138 million of which was profit. The rapid growth, according to charges by the US DOJ and others, was achieved by giving kickbacks to physicians ordering a battery of unproven cardiovascular diagnostic tests. Revenue came from Medicare and insurance companies but patients, documents show, were not billed for the tests, though the cost was often several thousand dollars.
Last year the government filed suit against HDL and this year settled with the company for $47 million, though it is unclear whether the government will now be able to collect. HDL was also sued by several large insurance companies, including Cigna. After a precipitous drop in revenue HDL filed for bankruptcy earlier this year.
Although HDL settled with the government, the government is separately suing three individuals: Tonya Mallory, a founder and former CEO of HDL, and two other partial owners of HDL and owners of BlueWave Healthcare Consultants Inc., Floyd Calhoun Dent and Robert Bradford Johnson. Until last year BlueWave was the outside sales force for HDL. BlueWave has been cited as playing a key role in the illegal kickback scheme that prompted the government investigation.
Virginia Business quoted Tonya Mallory: “It’s a great thing for the staff and patients of HDL. True Health told me that they brought their company up to mimic what HDL was doing for patients. They’re passionate about continuing HDL’s model and mission and, finally, the talented team of employees will get some much needed leadership.”
True Health has multiple links to HDL’s former contract sales provider, BlueWave Healthcare Consultants. According to sources, it is partially owned by BlueWave co-owner Robert Bradford Johnson, and a former BlueWave executive, Jeffrey “Boomer” Cornwell. More than a dozen former BlueWave sales representatives now work for True Health, these sources say.
Tipton Golias, a wealthy Texan who owns Helena Laboratories, provided early financing to HDL and as an owner collected millions in HDL’s profits. Goalias is now behind the financing of True Health, according to one source.
Also associated with True Health is Sam Fillingane, a family doctor in Mississippi, who had close ties to HDL and now works for True Health. As a family doctor received $6,000 a month to serve on HDL’s advisory board, was paid separately for giving talks on behalf of the company, and received $10,000 a month in processing and handling fees. Despite all these revenue streams, the company gave him $100,000 in unsecured loans “because he was struggling in his business.” Fillingane is now the director of medical education at True Health.
The same sources say that True Health continues to operate using the same illegal business practices that landed HDL in trouble. True Health continues to bundle multiple unnecessary cardiovascular and metabolic tests, promises patients they will not be billed copayments, and gives kickbacks in the form of payments for phlebotomy services and “consultation fees” for nonexistent phone calls. According to one source, “True Health calls the doc and they both put the receiver down for about an hour or so in order to create a record of a long discussion that never happened.”
Previous Stories About HDL:
- Beyond Kickbacks: More Questions About Unnecessary Cardiovascular Biomarker Tests
- Way Beyond Kickbacks: More Serious Misconduct Alleged Against Medical Testing Company HDL
- Embattled HDL Laboratory CEO Resigns Amid Federal Investigation
- Doctor: You’re Going To Have A Heart Attack! Patient: Your Tests Results Are Giving Me A Heart Attack!
- Cigna Sues Embattled HDL Laboratory For $84 Million
- Embattled Lab Nears Settlement With Government Over Kickbacks
- DOJ Settles With Embattled Lab, Criminal Charges For Executives Still Possible
- Inside The Scandal: Profit And Greed At An Embattled Laboratory Company
- Embattled Laboratory Files For Bankruptcy