Sequenom Inc. (NASDAQ: SQNM) is back in the news, but not in a good way. The company that saw its share price collapse in 2009 over its genetic test kits not doing what they were supposed to is now back in trouble, and its stock is trying to find support again around $3.00. What is so interesting about the news implosion here is that Sequenom’s stock is not even at a 52-week low.

Any company showing a 91% gain in revenues, even if it is $34.9 million in a quarter, should probably attract some attention from speculative investors who are willing to take on the risks of small cap stocks. The saying “the devil is in the details” sure comes to mind when you consider just how badly its stock is doing.

Sequenom CMM said that it experienced delays in receipt of payments as a result of molecular diagnostics coding changes adopted by CMS, Medicaid and third parties. These changes were said to include the elimination and replacement of certain molecular diagnostics billing codes. The company also said that several payors “are requesting additional information to process claims for services, and certain payors, including most state Medicaid plans, have not implemented the new codes, or in some cases are no longer providing coverage for certain tests.”

Where this company shot itself in the foot, and shareholders in the head, was that the company transitioned its billing operations. It had previously outsourced its billing, but the company thought that moving to an in-house billing system would be better. Sequenom reported that it experienced lower-than-expected collections by the external billing provider, which contributed to the decline in diagnostic revenues. When providers get fired, or even when they quit, they often tend to not perform as well going into the end of a contract.

The only good news we saw here was that Sequenom’s total gross margin for the second quarter was 30% versus 28% a year ago. The company reported that the Sequenom CMM diagnostics services business in the second quarter of 2013 was approximately 16%, versus being at negative gross margin a year earlier. Its gross margin for the genetic analysis business for the second quarter of 2013 was flat, versus the year earlier at 64%.

Sequenom shares hit a low of $3.00 in early Thursday trading, but the stock is now at $3.30 against a 52-week trading range of $2.65 to $5.36. While a 10% intraday recovery may sound good, keep in mind that the $3.30 price is still down 30% on the day.

Be advised that Sequenom is experiencing a 10-times normal volume spike as it has traded almost 25 million shares before noon, when its average daily volume is only about 2.4 million shares.

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