ALPHARETTA, GA / ACCESSWIRE / September 5, 2023 / RushNet, Inc (OTC PINK:RSHN), (the “Company”) announces heliosDX, a small business independent laboratory, has faced an insurmountable series of challenges over the past 16 months, resulting in its unfortunate closure. This period saw the convergence of healthcare market turbulence, insurance pressures, and regulatory changes that ultimately led to the company’s demise.
The past year and a half has underscored the importance of diversifying revenue streams, as income peaks cannot be taken for granted. However, even with unwavering determination and strategic maneuvers, the quest for alternative revenue sources does not always guarantee security.
heliosDX endured a relentless series of setbacks, with three primary events contributing to its business model’s collapse:
Insurance Bullying: heliosDX encountered significant adversity from major insurance players, notably Wellmed, which had a profound impact on the company’s revenues, resulting in an estimated loss of approximately $1,000,000 annually, and $1,500,000 to date.
Shift in Testing Preferences: Regulatory changes, exemplified by Palmetto’s (CMS MAC) preference for culture testing over PCR, caused a substantial decline in business revenues. This shift led to potentially delayed diagnoses and increased emergency room visits, further exacerbating the challenges faced by HeliosDX.
CMS’s NCCI Edits: On July 1st, without prior notice, CMS implemented adjustments to toxicology billable testing. These changes placed payments on hold for certain services, significantly impacting the company’s financial stability and fulfillment of obligations to key partners. This move was estimated to impact annual projected revenues by three to five million dollars.
Despite efforts to address points 1 and 2, the sudden implementation of the NCCI edits left heliosDX with limited options for course correction. To mitigate the financial strain, the company incurred substantial debt, but the loss of over 50% in revenue, through no fault of its own, proved insurmountable.
In response to these challenges, heliosDX took necessary measures to protect what remained of the business:
Referral of Clinics, Physicians, and Patients: On July 13th, all clinics, physicians, and patients were referred to other independent laboratories capable of servicing the customer base.
Employee Transition: heliosDX facilitated the transition of its employees to other independent laboratory facilities.
Bankruptcy Protection: The company is in the process of filing for bankruptcy protection and will liquidate relevant assets, including the reassignment or return of instruments to respective vendors.
In conclusion, the past 16 months have been exceptionally challenging for independent laboratories nationwide, resulting in several reputable closures nationwide, indicating industry consolidation. heliosDX’s closure marks a pivotal moment, and Rushnet is committed to a comprehensive reorganization process that will take time but is essential for the company’s future continuity.
Rushnet anticipates that these actions will be the most significant since the early 2000s, paving the way for a stronger and more resilient future. The current leadership will remain intact and lead the efforts of the reorganization starting with a domicile change.
Safe Harbor Notice
Certain statements contained herein are “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995). The Company cautions that the statements and assumptions made in this news release constitute forward-looking statements and make no guarantee of future performance. Forward-looking statements are based on estimates and opinions of management at the time statements are made. These statements may address issues that involve significant risks, uncertainties, estimates made by management. Actual results could differ materially from current projections or implied results. The Companies undertake no obligation to revise these statements following the date of this news release.
SOURCE: RushNet, Inc.
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