Texas based health diagnostics company lays off 400 employees at Richmond laboratory

RICHMOND, Va. -- A Texas-based health diagnostics company said it has started laying off nearly 400 employees at its laboratory in Richmond on Monday and added more layoffs and a possible shutdown may be necessary.

True Health Diagnostics, LLC (THD), which stated on its website that it provides “comprehensive diagnostic testing, health management, and clinical integration services”, sent a letter to the Virginia Employment Commission and the City of Richmond on July 29, 2019, informing them about the layoffs.

The letter, signed by the company’s Chief Financial Officer, said this decision goes back to last month when it said the Centers of Medicare and Medicaid Services (CMS) informed THD that it would stop all Medicare payments to the company on June 11, 2019.

The letter further stated that THD was able to obtain temporary, partial relief through the federal court system, but the full payment stoppage was reinstated on July 22, 2019.

The company wrote that payments from CMS accounted for a “significant source of revenue” for them and without the payments, they needed to layoff employees.

The letter listed a total of 392 employees across a variety of departments. It said the "first separation from employment” occurred on Monday and “it is anticipated that all separations will occur by September 27, 2019.”

The company added it is "exploring all options to obtain additional funding”, but if it is unable to, then further layoffs may be necessary and it may even have to shutdown operations entirely at the laboratory.

CBS 6 has reached out to CMS for comment and to ask why the payments were stopped, but have not heard back.

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