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LabCorp, AmeriHealth Sued Over Allegations of Collusion on Medicaid Lab Services

NEW YORK (360Dx) – Laboratory Corporation of America and AmeriHealth are facing allegations that the two companies colluded to award LabCorp an unlawfully exclusive contract to provide lab services to Medicaid patients in the state of Delaware.

The lawsuit, filed by Prescient Medicine Holdings in US District Court for the District of Delaware last week, alleges that LabCorp conspired with AmeriHealth, which serves as a managed care organization for Delaware Medicaid, to prevent competition in the provision of Medicaid lab services.

In the complaint, Prescient alleges that when non-profit community services organization Connections Community Support Programs selected Prescient to replace LabCorp as the lab services provider to the Delaware homeless veterans and chronically homeless adults that the organization serves, LabCorp and AmeriHealth colluded to thwart Prescient's contract.

According to the suit, when LabCorp learned that it was being replaced as Connections CSP's lab services provider, LabCorp's vice president of sales told Connections CSP that lab services claims submitted to Prescient would not be reimbursed because Prescient would not be credentialed as an in-network laboratory service provider for Delaware Medicaid patients by AmeriHealth.

In addition, the suit alleges that LabCorp's vice president of sales "repeatedly communicated inaccurate information about Prescient's capabilities" to Connections CSP executives.

Prescient asserts that the state of Delaware, through the Delaware Medical Assistance Programs, or DMAP, approved Prescient's application to become a credentialed DMAP provider in June of 2017. However, as the start date for Prescient's contract with Connections CSP drew closer, Prescient alleges that AmeriHealth "purposefully stalled" Prescient's application to be an in-network Medicaid provider by repeatedly saying that Prescient's application was "under review" in response queries.

Eventually, the complaint alleges, AmeriHealth responded that it had made a "business decision" to only to have one laboratory provider "in network" in Delaware, and that provider was LabCorp. According to the complaint, AmeriHealth never informed Prescient in writing why it was denied in-network status, something that the complaint states federal regulations require AmeriHealth to do.

The suit accuses both companies of two counts of Sherman Antitrust Act violations, two counts related to interference with a business contract and a potential business opportunity, and one count of civil conspiracy. In addition, the complaint alleges that LabCorp engaged in business defamation against Prescient, and accuses AmeriHealth of fraud for asserting that the company's application for in-network status was "under review" when AmeriHealth allegedly had no intention of approving the application.

An AmeriHealth spokesperson said the company does not comment on pending litigation.

A LabCorp spokesperson said the company does not comment on pending litigation but intends to vigorously defend the lawsuit.