Health Diagnostic Laboratory, Richmond's embattled health testing firm, is moving toward settling a federal probe while laying off 42 employees.
The layoffs come as the firm is said to be settling a probe with the U.S. Department of Justice and the Department of Health and Human Services.
The Wall Street Journal had reported that HDL will pay about $47 million as part of the deal. Other news reports say that the firm will enter into a five-year-long "corporate integrity agreement" in which the firm will submit to tighter regulation and scrutiny. No figure for a settlement could be confirmed.
According to a Health Lawyers Website, such an agreement is usually part of a settlement between the government and a health care provider who has been the subject of probes under the False Claims Act or "who has been found guilty in acts of, defrauding Medicare, Medicaid or any other Federal health care programs."
As part of the arrangement, the firm can still participate in federal health care programs.
HDL was accused of paying doctors extra fees if they used its blood-testing services for Medicare patients. News of a federal probe came out last summer and in September, the co-founder and head of the firm, Tonya Mallory, resigned.
The company has been changing its billing practices, revamping its sales staff and cooperating with federal regulators under a new chief executive.
The 42 employees, including 30 in the Richmond area, are said to be part of a company program to provide health care screening for corporate clients. The firm laid off 132 workers in November.
The company got a break when a $205 million lawsuit filed against it by BlueWave Healthcare Consultants of Alabama was recently dismissed. As part of its restructuring, HLD terminated its contract in January with BlueWave, which had provided most of its sales help. BlueWave then sued.
HDL still faces a $84 million lawsuit filed by Cigna, a Connecticut-based insurance firm.
On Friday, HDL listed several sales jobs on its website, including three compliance jobs in Virginia.