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Missouri Diagnostic Lab That Provided Services For Most Missouri Nursing Homes Closes

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Gamma Healthcare's headquarters in Poplar Bluff, Missouri.

Nearly 900 long-term care facilities in Missouri contracted with Gamma, including 459 of the state’s 504 skilled nursing facilities and more than 400 assisted living and residential care facilities.

Gamma Healthcare Inc., a company that provided laboratory and radiology services for hundreds of Missouri nursing homes, has shut down its operations after it was unable to resolve differences with federal regulators.

The 39-year-old, Poplar Bluff, Missouri-based company informed employees on Tuesday that it would cease all laboratory operations effective just after midnight.

The Centers for Medicare and Medicaid Services pulled the lab certifications for Gamma’s main labs in Poplar Bluff and Springfield, Missouri, after finding deficiencies in their COVID-19 testing procedures.

Gamma said it took various steps to correct the deficiencies but was unable to convince CMS to restore its certifications.

In a letter to employees announcing the company’s closing, Jerrod Murphy, its president and CEO, said there was no proof that the quality of its non-COVID-related testing was compromised.

“Despite this, CMS suspended all testing at Poplar Bluff, the nucleus of our company, which was overbroad and unnecessary,” Murphy wrote. “And, unfortunately, [this] had the effect of rendering us, for the most part, unable to continue operations.”

Gamma provided an array of routine diagnostic tests for nursing homes and long-term care facilities in Missouri, Kansas and nine other states. Those included tests for diabetes, pneumonia, urinary tract infections and other conditions.

Nearly 900 long-term care facilities in Missouri contracted with Gamma, including 459 of the state’s 504 skilled nursing facilities and more than 400 assisted living and residential care facilities.

Nikki Strong, executive director of the Missouri Health Care Association, a trade group representing hundreds of long-term care facilities, said her members were scrambling to find other clinical labs not just to do their diagnostic testing but to perform phlebotomy services – drawing blood from nursing home patients – and transport the samples to the labs. Gamma did both.

“We’re starting to find labs who are able to process all the lab work that needs to be done,” Strong said. “Now the key is finding both the phlebotomy services and then the courier services associated with that to get the draws from the facility to the lab.”

Mark Weller, an attorney with Kansas City-based Polsinelli who represents Gamma, said there was “slim hope” at this point of reaching an accommodation with CMS.

“There was some outreach from CMS over the weekend asking for Gamma’s customer list and states where they operate,” he said in an email. “We were encouraged. But it appears that was simply an effort to find other labs to step in.”

Murphy, whose extended family owns Gamma Healthcare, could not be reached for comment. But in an interview Tuesday with KFVS-TV in Cape Girardeau, Missouri, he called CMS’ action “unnecessary” and said Gamma had stopped doing COVID-19 testing in an effort to avoid having its other testing operations shut down.

In his letter to employees, Murphy said he was “praying for the patients we serve and I am praying for you and your families.”

As a reporter covering breaking news and legal affairs, I want to demystify often-complex legal issues in order to expose the visible and invisible ways they affect people’s lives. I cover issues of justice and equity, and seek to ensure that significant and often under-covered developments get the attention they deserve so that KCUR listeners and readers are equipped with the knowledge they need to act as better informed citizens. Email me at dan@kcur.org.
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