State of Mid-Atlantic Labs

[anonymous]

Heard they could not sell building. Offers too low. I was told they need to sell company now.

In this scenario do they need to sell the company because of their bankruptcy deal made or because the lab industry is dead and they want out?


Heard former vendors want their full money back that’s owed, but SH and EH are trying to evade it and not pay back.

 

[TheRealThing]

With all the talk on here about Ammon, Medcreen, Clarity, ADL, SDX/Mako, RDX/Xeron and many other NE labs, is there any future in the lab industry? NY is a mess with Enzo selling to LC, Xeron being sold, (Sherman Abrahms, all Russina owned labs & Lenco pay to play business model, BRL being BRL, Accurate is gone, and TrueTox bankruptcy rumors. The tox market has not come back due to COVID and NJ Medicaid cuts. NY tox is worthless due to low pay and new drug testing guidelines. Delaware is a Labcorp strong hold. PA and the HealthChoices limitations. Maryland is small and everyone is fighting over the same 40 accounts. Blood testing is tough due to everyone having limited insurance contracts (except L & Q). It seems there is no future unless your name is LabCorp or Quest or you have deep pockets to develop a companion or specialty test (ala ProPhase)

What are everyone's thoughts on this? And please no personal attacks on anyone. Just your honest assessment of the NE lab market. I for one have my resume out there and are looking at healthcare IT and pharma.

The lab industry was going under before COVID. Everyone made a ton of money during COVID, but post-COVID you’re seeing all the labs who were on their way out, now heading out. Tox labs are finished on the East Coast. The reimbursements are terrible and now you need medical necessity in order to order. The days of making big money ($800 per urine cup) is over. Reimbursement on urine Tox is about $30? Maybe a bit more or less? Tox labs are doomed. Specialty labs are also doomed. Insurance companies are strangling the lab game. The days of this industry making a ton of money is all over. Insurance companies are going after practitioners who over-order by way of panels. If you test without medical necessity or use of improper ICD-codes, the lab isn’t going to be paid and the doctor is going to be slapped on the wrist eventually. The industry was headed towards molecular testing before insurance companies decided they weren’t going to allow it. Bottom line is this industry killed itself with all the rampant fraud pulled over the last 2-3 decades via every private lab all over the country. EKRA has made it illegal to pay reps commission on specimens brought in. Thanks to all the urine Tox labs ruining the business with their shady under the table deals with crooked practitioners. So many doctors and lab owners were landing in prison those in charge of this country had to step in to bring order back to an industry long since indulged in scandals.

Today, we’re left with insurance companies pulling the rug on everyone from specialty labs, to full service labs, to Tox lab. No one gets a break. Reimbursements are down, panel testing is being denied and audits are a constant threat to anyone attempting to circumvent the rules. At the very end, there will be three players left standing: Quest, LC and Sunrise. Sales reps who make it to the other side will be pretty well off. No competition and the only games in town. If you’re in the lab industry, look to get out.

 

[anonymous]

Since the toxicology business is dying, does this mean all these small labs are being forced to shut down with all the “under the table” actions some took?

How long would it take before the major labs like LC and QD just fully run the show?

 

[anonymous]

the pay for reps once there are only 3 labs will be terrible. Why pay top dollar. L & Q already pay sh*t wages compared to private labs. The industry destroyed itself and is only getting worse. You know have more Russians, Middle-Eastern and Hasidics coming into the field with no idea what they are doing, but overbill, rip off the system, then flee back to their countries once caught. It is a sad day as some great labs will be folding soon. L & Q made labs a commodity, destroyed the pricing for their stock holders to gain market share and won't be able to handle all the work once the small regional labs are gone. This country is in serious trouble as this has occurred in every industry. The US is on life support and will soon be dead!

 

[anonymous]

Any updates on the labs listed?

 

[anonymous]

Any updates on the labs listed?

The labs mentioned are ALL in varying degrees of trouble. If they could sell, they would. Except there are no buyers as LC & Quest have learned a hard lesson in the diminishing Toxicology market. Ever heard the expression, "catching a falling knife?" Most will just fade away over the next several months as the lab industry continues to consolidate and the weak die off.

 

[anonymous]

The labs mentioned are ALL in varying degrees of trouble. If they could sell, they would. Except there are no buyers as LC & Quest have learned a hard lesson in the diminishing Toxicology market. Ever heard the expression, "catching a falling knife?" Most will just fade away over the next several months as the lab industry continues to consolidate and the weak die off.

The last NJ Tox lab standing will be in the best position moving forward. My money is on one lab being the last in business, but I won't say who. I want to see how this plays out. With Ammon having an HRSA claim against them, Clarity having troubles of their own, TT and their audit, and ADL selling NY lab they will all have trouble surviving. With that being said, Medscreen and SDX are back to their old payoff ways, which is not a lasting business model. Time will tell who survives!

 

[anonymous]

The last NJ Tox lab standing will be in the best position moving forward. My money is on one lab being the last in business, but I won't say who. I want to see how this plays out. With Ammon having an HRSA claim against them, Clarity having troubles of their own, TT and their audit, and ADL selling NY lab they will all have trouble surviving. With that being said, Medscreen and SDX are back to their old payoff ways, which is not a lasting business model. Time will tell who survives!

What a mess. ADL was trying to merge with Ammon, guess it failed. But then Ammon was claiming they got back all these huge accounts and were out of bankruptcy. Clarity has been rather “low” about all and denying any troubles.

 

[anonymous]

What a mess. ADL was trying to merge with Ammon, guess it failed. But then Ammon was claiming they got back all these huge accounts and were out of bankruptcy. Clarity has been rather “low” about all and denying any troubles.

No one will purchase or merge with Ammon until they show proof of being out of bankruptcy. Biggest issue for NJ labs are rumored revenue since NJ Medicaid Cuts- Ammon $5m, Clarity $5m, Medscreen $6.5m, SDX $6-8m, TT $10m, ADL $20m. These lab revenues are down abut 50%. Crazy!

 

[anonymous]

No one will purchase or merge with Ammon until they show proof of being out of bankruptcy. Biggest issue for NJ labs are rumored revenue since NJ Medicaid Cuts- Ammon $5m, Clarity $5m, Medscreen $6.5m, SDX $6-8m, TT $10m, ADL $20m. These lab revenues are down abut 50%. Crazy!

Yikes! A huge burn for all these labs. What is the deal with the HRSA claim that’s popping up against Ammon? TT is another lab that’s going under, fraudulent as ever.

 

[anonymous]

No one will purchase or merge with Ammon until they show proof of being out of bankruptcy. Biggest issue for NJ labs are rumored revenue since NJ Medicaid Cuts- Ammon $5m, Clarity $5m, Medscreen $6.5m, SDX $6-8m, TT $10m, ADL $20m. These lab revenues are down abut 50%. Crazy!

From my understanding Ammon is being forced to sell its building because of the bankruptcy and the bankruptcy court. These are the forces behind that sale. So, where would they do business from? Even if someone merged with them, who will rent to them and where would they be doing this from as the Haupt family are claiming they have no money for survival. It’s been known they’re struggling to make pay roll with the small amount of employees they have left.

 

[anonymous]

The last NJ Tox lab standing will be in the best position moving forward. My money is on one lab being the last in business, but I won't say who. I want to see how this plays out. With Ammon having an HRSA claim against them, Clarity having troubles of their own, TT and their audit, and ADL selling NY lab they will all have trouble surviving. With that being said, Medscreen and SDX are back to their old payoff ways, which is not a lasting business model. Time will tell who survives!

Where do you guys come up with this shit, there are ton of labs in Jersey. You name 5 shitty ones. Millennium, aegis, precision, all have a lot of business in Jersey. Tox isn’t going anyway. It really isn’t, the smart labs are the ones watching overhead and being innovative. Good amount of those still out there, the real problem is finding people to work in the field. Sdx, clarity, Ammon, Acutis, true tox, synergy those labs will all be closing shop within a year. But tox will still strive and outside labs from Q and L will still have business in Jersey

 

[anonymous]

Where do you guys come up with this shit, there are ton of labs in Jersey. You name 5 shitty ones. Millennium, aegis, precision, all have a lot of business in Jersey. Tox isn’t going anyway. It really isn’t, the smart labs are the ones watching overhead and being innovative. Good amount of those still out there, the real problem is finding people to work in the field. Sdx, clarity, Ammon, Acutis, true tox, synergy those labs will all be closing shop within a year. But tox will still strive and outside labs from Q and L will still have business in Jersey

The more interesting question is how these listed labs (in the red) are even surviving right now. Are they all going to really shut within a year?

 

[anonymous]

Where do you guys come up with this shit, there are ton of labs in Jersey. You name 5 shitty ones. Millennium, aegis, precision, all have a lot of business in Jersey. Tox isn’t going anyway. It really isn’t, the smart labs are the ones watching overhead and being innovative. Good amount of those still out there, the real problem is finding people to work in the field. Sdx, clarity, Ammon, Acutis, true tox, synergy those labs will all be closing shop within a year. But tox will still strive and outside labs from Q and L will still have business in Jersey

Millenium, Aegis, and Precision are all in trouble as well. They just put on a better front. They do mostly pain management tox. That is dying a slow death too. SUD tox is also dying. You are correct that controlling the bottom line is important, but inovation in tox is useless. Insurance (Private and Public) do not want to pay for drug testing at sustainable rates for most labs. The labs that will survive are the ones that can keep cost low. The problem is most labs want high profits and some labs have huge debt from over expansion and COVID. Tox will be around but at $20/sample. The days of averaging $75-$100 per sample will be over for good soon. I have been around this business since the late 1980's and have been through this repricing multiple times. This time, forces are too strong. There will only be a handful of labs left nationally in 5 years and we will be single payer. It will happen!

 

[anonymous]

What’s the HRSA claim mentioned?

 

[anonymous]

Can these labs last until December realistically?

 

[anonymous]

Can these labs last until December realistically?

Yes all the labs can last until December. Most are break even or holding there own. Issue will become if the labs want to stay in business for drastically reduced profits moving forward. Remember most of these labs were used to 50%+ profit margins. If they can survive on 10% then they will last. Most don't want to put in the work for reduced profits. My bet is the labs that make it are the ones that have been in business the longest. Good luck to all the labs, you will need it!

 

[anonymous]

Is there any positive news about these labs at all? Some were saying they’re off the market or out of bankruptcies.

 

[anonymous]

Is there any positive news about these labs at all? Some were saying they’re off the market or out of bankruptcies.

Some are off the market and Ammon said they were out of bankruptcy, but the court dockets say they are not. These labs pulled off the market because offers were low (1x revenue) with only 40-50% down and a 2-3 year earn out. None of the owners took the bait as they know people are looking to steal labs as minimal price. It is a complete mess in the NE for labs. Stay tuned to see who survives!

 

[anonymous]

The bell will soon toll for all these labs. It is just a matter of time (1 year max) before large labs put the little guys out of business. They could have done this anytime, but never wanted to. Now they need market share for stock price, so they will stomp out all labs under $60m and purchase all labs bigger.