(Updated)
True Health Diagnostics, the new laboratory that bought the assets and adopted the business model of the disgraced and bankrupt laboratory company Health Diagnostic Laboratory (HDL), is turning to some old, unethical, and illegal tricks to grow its business.
As I’ve reported previously, one key to the spectacular growth of HDL laboratory involved surreptitious bribes to doctors– often in the form of excessive processing and handling (P&H) fees. In the wake of the government investigation of HDL and the company’s subsequent collapse this strategy is no longer viable.
Now evidence has emerged that True Health is turning to the old trick of physician owned laboratories to incentivize its physician customers. With few exceptions, physician owned laboratories are illegal. Dating to the late 1980s, the Stark law prohibits physicians from owning laboratories and other business entities from which they can benefit from self-referral.
“The real problem,” one industry veteran told me, “is the incentives and selling clinical tools and services, not as a way to benefit patient outcomes, but as a means to increase cash flow.”
Rumors have been circulating for months that True Health was engaging in various schemes to give financial incentives to doctors. I now have documents that offer an in-depth glimpse at the details of one of these schemes.
Connecting The Dots…
The documents originate from Travis Boulware, a Managing Partner at Boulevard Endeavors LLC. “We Are a Company of Passionate Drug Test Management People,” the company’s website proclaims in bold letters, though the rest of the website is an empty shell. Boulware formerly worked at Ameritox, a company that paid the US government $16 million in fines because, you guessed it, the company bribed doctors to use its tests.
It is probably not a coincidence that Chris Grottenthaler, the CEO of True Health, previously served as the VP of finance for Ameritox. Ameritox, which specialized in drug testing, was a “pioneer” in the use of bribes to entice doctors to use their tests.
I received a copy of an email sent by Boulware to a doctor, offering the doctor Boulware’s help in setting up “Physician Owned Entities including laboratories.” This email shows how True Health and its partners have cooked up a toxic stew that combines the Ameritox drug testing scheme with the HDL cardiovascular risk testing scheme and additional services.
“The email describes at least five different ways the physician can order diagnostic procedures and lab tests for a range of issues, such as pain management, drugs-of-abuse testing, wellness, and heart/cardiovascular function,” explained Robert Michel, Editor-in-Chief of The Dark Report, an intelligence service covering the clinical laboratory industry. “The email further states that the physician can generate additional revenue per patient by adding these lab tests and diagnostic procedures to the medical practice—although that physician has never determined there is the clinical need for these lab tests and diagnostics before now.”
“This email illustrates how these companies are willing to push compliance with federal and state laws that define illegal types of inducements and kickbacks,” he continued. “These companies cannot profit unless the physician decides to begin ordering these lab tests and diagnostic procedures, which are often medically unnecessary. Not only is this a violation of the federal and state anti-kickback laws, but they put patients at risk of harm while increasing the cost of healthcare.”
In the email Boulware wrote to the doctor (click here to read the entire email message):
“Within the primary care scope of practice, it is common to send out many services without seeing any revenue back. After my review, I can present a few options to consider including but not limited to; Physician Owned Entity, in-house simple screening devices, and possibly looking at how diseases are managed from a clinic organizational structure.”
The Documents
Boulware included a number of documents that provide important details about the scheme:
There is a Non-Disclosure Agreement, about the lab company, called ESA Toxicology LLC, in which the doctor is being invited to invest for the purpose of referring specimens in the kickback scheme.
A chart showing the return on investment of a cardiac testing device, the Max Pulse, showing that doctors can make over $120,000 a year giving the test to 5 patients every day. (It should be noted here that there is currently no guideline-accepted indication for the widespread use of this device in clinical practice.)
A pro forma spreadsheet showing the business model of the toxicology testing physician-owned lab. This suggests that the physician can earn nearly $7,000 each month by referring his or her own patients to the lab.
A sample results form from True Health Diagnostics. It should be noted that these broad panels, like the very similar panels sold by HDL, have absolutely no legitimate indication in common clinical practice.
The point of all these documents is to demonstrate the financial benefits of these tests and devices to the doctor. Completely lost in the process is any concern for the patient.
Update, February 17–
In an apparent response to the letter sent by Boulware to the physician, a lawyer representing True Health Diagnostics sent a cease and desist letter to Boulware. In the letter, True Health denies any association with the revenue opportunity schemes proposed by Boulware or any affiliation between Boulware’s company and True Health.
The law firm representing True Health is Perkins Coie, according to the letterhead on the letter to Boulware. The lawyer’s name and address is redacted on the copy I received. According to an article in Richmond BizSense, a Perkins Coie lawyer, Eric Walker, represented Robert Bradford Johnson, one of the owners of BlueWave, the sales team closely tied to HDL. True Health has stated that the owners of BlueWave have no association with True Health, but, as the BizSense article reported, Johnson represented True Health at a trade show and True Health, a private company, has not disclosed the names of its owners. (As I reported recently the owners of BlueWave have had their assets frozen by the government.)
Previous Stories About HDL and True Health Diagnostics:
- 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
- Bankruptcy Judge Approves Sale Of Embattled Diagnostic Lab Company
- Zombie Laboratory Company Sics Bill Collectors On Patients Promised Free Tests
- New Lab Company Seeks To Bury Links To Zombie Lab And Rogue Sales Team
- A Lab Industry Veteran Deciphers The Zombie Lab Enigma
- The Real Losers In The Zombie Versus Vampire Lab Company Court Battle
Related Documents:
Solicitation email from Travis Boulware
Non-Disclosure Agreement [PDF]
True Health Diagnostics Sample Results
True Health 2016-02-15 Cease and Desist to Boulevard_Redacted-2
And ESA toxicology continues to grow. Is there any legal backlash for physicians that use this group?
Any response to Jed’s question? I’ve had several physician friends mention this group.
I am reporting to Fraud Dept. As I continued to investigate a 2nd doctor of mine sent urine to this lab April of 2015. My ins. paid them $15K!!!
I’ve lost all respect for my doctor. I just received a bill for $2,321.20…for a routine urine test to make sure that I am not on drugs before refilling my prescriptions. Complete and Utter BS!!!! My lawyer is getting involved!
I have not got any bills from THD. However, they did file the claim to my insurance company in the amount of $7768. The claim was denied. I was shocked to see the claim when I saw the claim on my insurance website. I mean this was for routine physical check-up, how can a routine physical check-up be this high?
Did you ever get a bill? I have a EOB for 13k that was denied online, but I’ve never gotten a bill.
I Googled the company to learn there are a lot of folks getting bills this month for ridiculous amounts for drug screening. Mine totaled over $22,000.00 for urine testing.
How can we report (ESA Toxicology, LLC) and the PA that ordered this test. I had a routine urine sample and they billed at $17,452.43 and my insurance paid $11,629,32. Now they are trying to say I owe $2,332,62. Utter and complete garbage. I did reach out to my doctors office and they are saying I am not responsible for the balance due. Hmm seems shady to me. I reached out to ESA and they are going to mail me a hardship form.
I did reach out to my insurance company about this claim and they said they would forward it on to the fraud dept but I never heard back :/ The rep said there wasn’t much they could do because they had already paid the lab.
I’m hearing more and more about these physician kickbacks. Ironically, what is supposed to help them (though illegal) will actually drive their business away altogether as people like myself will begin to avoid the industry entirely!
I went to Lifestream Health Center in Coppell Texas because of fatigue and a friend recommended them.They said they were going to do a more extensive blood work up… they BILLED MY INSURANCE COMPANY OVER $13,000.00 FOR 64 test… they tested everything – They ordered the blood test through True Health Diagnostics. I believe there must be kick backs or something going on. I am appalled at this. This was uncalled for and if they had informed me that it was this expensive, I would have never done it. Total collusion.
I am so thankful for your article. I work for a very rural critical access hospital. We have been struggling financially and have been approached by several vultures who would like to provide us with a “joint opportunity”. In essence it could save our hospital. I believe that they specifically search out hospitals that are in dire straits to do their dirty work…the billing portion. Something didn’t seem right about their business model but I couldn’t quite put my finger on it. Thank you for filling in the missing pieces. We may go under but at least we will still have our integrity.
What do we do if we’ve been a victim of this? I have a $13,000 bill from ESA for just blood work.
Dr owned or not. Contracts with monster sized many dr office med groups are big $$$ to large top testers like Amerato….. etc.The largest didn’t get that way by “good” work except if you mean for the Drs. Many Drs are in high liability places with old folks on high dose opiates and combos,. Old patients are ill and Drs must find a way to get rid of them without liability for death etc. Anyone who thinks their isn’t a high level rep from the monster Dr offices and a high level rep lets say Amera….. where a big wig rep can pick up a phone and have the Drs bidding done for results the way they want them is out of touch with reality and the reality of what big $$$$$$ contracts can buy. Also , you can count on top of the heap cream of the crap I mean crop places like Ameratoxx to come up with data that supports the need for their existence and constant use. Especially in this era.
True Health comes into a facility and takes over the lab, using the labs CLIA license to perform their testing. Two labs cannot run under one CLIA number. True Health performs testing in one state and sends the billing to another state. Majority of the coding is not on patient charts until sent to the billing department. Double billing and other fraudulent activity continues. Little River Healthcare is directly involved with the company. LRH has closed two acquired hospitals. LRHs billing practices were so bad, they charged patients the total bill because they were too late in filing the claim with insurance agencies. My thoughts on this: don’t send to insurance because they won’t get full master charge prices. So, they skip insurance and expect the patient to pay. This is why I received a greater than 1200.00 dollar bill 9 months later, but did not receive a denial of the claim from my insurance. Tell me how that happened if not for fraudulence or double billing?
Sorry, that is a 12,000.00 bill.