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Currently in Chapter 11, Natural Molecular Testing Will Shut Down, Repay CMS $71M

NEW YORK (GenomeWeb) – Natural Molecular Testing, currently in Chapter 11 reorganization, has reached a settlement with the Centers for Medicare and Medicaid Services to pay back the agency $71.1 million in overpayments received by NMT. 

In court documents filed on Thursday in US Bankruptcy Court, Western District of Washington at Seattle, the trustee for NMT said the firm will cease all operations, end its plans to reorganize, and liquidate its assets. 

Under the terms of the settlement, NMT will begin repaying CMS after it has paid other creditors $1 million. 

NMT was a high-complexity testing laboratory headquartered in Renton, Washington that filed for Chapter 11 protection in October 2013. Shortly later, CMS stopped reimbursing NMT for its genetic tests used to help guide treatment decisions, after it became aware of improprieties regarding claims paid to the lab. 

As part of a review by a Medicare contractor into the alleged improprieties, the contractor found numerous "deficiencies with [NMT's] billed Medicare claims," according to court documents. They included questions about the medical necessity of the tests performed; a lack of documentation around the completion of the testing; multiple billing claims for the same date of service; use of the test for screening purposes, which Medicare does not cover; and other problems. 

The Medicare contractor determined CMS had overpaid NMT about $71 million for the claims. In total, CMS had two separate unsecured claims of $71 million and $60.3 million in connection with NMT's Chapter 11 bankruptcy filing. The two claims will be merged into one claim for $71.1 million upon the court's approval of the agreement. 

A hearing date for the deal has been set for Aug. 20. 

NMT was once one of the largest testing facilities in the US and included among its partners GenMark Diagnostics and Luminex. In 2013, three months before filing for Chapter 11 reorganization, NMT forged a collaboration and licensing agreement with Luminex to develop a personalized medicine panel.

That agreement caught GenMark off guard and sent the firm reeling as it was a major customer of NMT. At the time, more than 60 percent of GenMark's revenues derived from NMT.

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