Bloomberg Business recently published an article that says, among other things, embattled urine drug toxicology company Millennium Health (MH) is close to finalizing a deal with its lenders “to restructure the company in bankruptcy court”.
The Bloomberg article also says the settlement MH is negotiating with the federal government could reach $275 million (as opposed to $250 million as previously reported), and MH is offering to place itself under the control of its creditors. In exchange:
…the lenders wouldn’t pursue potential legal claims against owners including founder James Slattery and private-equity firm TA Associates that the probe wasn’t disclosed to investors while the company was marketing the $1.8 billion loan last year, [people with knowledge of the matter] said.
The current equity holders would provide funds to Millennium so it can pay the settlement reached this week with the U.S. Department of Justice over allegations of overbilling a federal health-care program and other matters, said the people. A group of owners, including Slattery, would provide most of the funds, while TA Associates would pay a minority share, they said.
The government has not yet publicly shared (at least that I have seen) what exactly it is MH is alleged to have done, but the Wall Street Journal reported in June 2015 MH was being accused of “bill[ing] the federal government for unnecessary tests.”
Right after that WSJ article was published, I wrote about a Civil Investigative Demand (CID) letter that was sent to a physician in August 2014 that stated the Department of Justice (DOJ) was investigating allegations that the physician:
… and/or [MH] submitted, or caused to be submitted, false claims to federal health care payors […] for medically unnecessary urine drug testing (“UDT”)…
The CID stated the DOJ was also investigating whether:
…MH “provided kickbacks or other forms of unlawful remuneration to health care providers […] in order to induce UDT referrals to [MH]”.
See this article for more of the CID’s contents.