Wellmont Health System, Kingsport, Tenn., said it has entered a joint-venture agreement with a hospital-owned laboratory company, Spectrum Laboratory Network, Greensboro, N.C., to manage the operations of Wellmont's MEDex Regional Laboratories. MEDex, a for-profit subsidiary of Wellmont, filed for Chapter 11 bankruptcy last year after the discovery of a financial fraud scheme at MEDex. Completion of the agreement with Spectrum, expected within 60 days, would resolve the bankruptcy. Under the agreement, Spectrum would operate labs at four Wellmont hospitals and various outpatient facilities. Spectrum, a for-profit company, is owned by two not-for-profits: High Point (N.C.) Regional Health System and Moses Cone Health System, Greensboro.
Michael Ladd, MEDex's former chief executive officer, pleaded guilty last year to one count of making false statements and reports for the purpose of influencing the actions of a federally insured bank. Ladd was sentenced to 41 months in prison and ordered to pay $2.1 million in restitution. Ladd was accused of forging the signatures of MEDex directors in order to fraudulently obtain loans that the board had never approved. -- by Vince Galloro