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UnitedHealthcare Wins $128M Fraud Lawsuit Against Texas Clinical Labs

NEW YORK – A federal court has ruled for insurer UnitedHealthcare (UHC) in its fraud lawsuit against a group of Texas clinical laboratories and entered a judgment of $128.3 million against the defendants.

The US District Court Northern District of Texas Dallas Division on Tuesday granted UHC's motion for partial summary judgment and case-ending sanctions against clinical lab firm Next Health and its subsidiaries United Toxicology, Medicus Laboratories, US Toxicology, and American Laboratories and default judgment against Rob Close, Next Health's former VP of sales. The court also granted summary judgment against a separate group of defendants, the pharmacy firms Executive Healthcare, Dallasite, Total Pharma, and Apex Pharma.

The court entered a judgment of $90.3 million against Close, Next Health, and its subsidiaries, a judgment of $16.3 million against Executive Healthcare, a judgment of $8.7 million against Dallasite, a judgment of $6.7 million against Total Pharma, and a judgment of $6.3 million against Apex Pharma.

UHC filed suit against the defendants in 2017, alleging that they had paid bribes and kickbacks to physicians and other referral sources who ordered drug and pharmaco-genetic testing from the labs. It also alleged that Next Health and its affiliated labs performed and billed for tests that were not ordered by physicians and improperly billed for services that they did not perform.

Next Health and its subsidiaries filed a countersuit alleging that UHC was using the lawsuit to claw back payments already made and avoid making payments for outstanding bills. The court dismissed this countersuit in 2019.

In 2018, Next Health executives Semyon Narasov and Andrew Hillman pled guilty to federal healthcare fraud charges including submitting fraudulent lab claims to private and government insurers. Narasov and Hillman were sentenced to, respectively, 76 months and 66 months in federal prison.