Dive Brief:
- Millennium Health, the largest U.S. drug-testing lab, has filed for bankruptcy after agreeing to pay a $256 million settlement last month for billing Medicare and Medicaid for unnecessary testing. According to Bloomberg Business, the company received more than $630 million from Medicare for drug testing between 2007 and 2014.
- The company's reorganization plan, expected to be completed by the end of the year, includes eliminating $1.2 billion in debt, and the $1.75 billion in loans under its current credit agreement will be replaced by a new $600 million term loan.
- William Brock Hardaway, Millennium CEO, said in bankruptcy papers the company had challenged the government's bid to revoke its billing privileges, but said in a recent statement he respects the government's role in health oversight.
Dive Insight:
The company could lose lender backing if it doesn't meet certain milestones or pay the government by Dec. 30. James Slattery, company owner and TA Associates Management LP, a private-equity firm, will pay $325 million for the federal settlement and working capital costs, as reported by the Wall Street Journal.
Millennium will stay open during its chapter 11 case and said no creditors, other than its lenders and owners, will be affected by its restructuring. The company generated $687 million in total revenue last year and tested 2.7 million specimens.