Press Release: 7/29/2025

AG's Office Secures Guilty Plea, Restitution From New Bedford Clinical Lab For MassHealth Fraud And Kickback Schemes

 

Optimum Labs to Pay $830,000 in Restitution; Owner Sentenced to Two Consecutive Sentences of 2.5 Years in House of Correction, Suspended for 3 Years

FOR IMMEDIATE RELEASE:

7/28/2025

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Sabrina Zafar , Deputy Press Secretary

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Call Sabrina Zafar , Deputy Press Secretary at (617) 727-2543

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Email Sabrina Zafar , Deputy Press Secretary at Sabrina.Zafar2@mass.gov

BOSTON — The Attorney General’s Office (AGO) today announced that Optimum Labs, Inc. (Optimum Labs), a New Bedford based clinical laboratory, and its owner, William Owens (Owens) of New Bedford, have pleaded guilty and admitted to sufficient facts on charges related to two separate MassHealth fraud and kickback schemes. The charges are based on the submission of false claims for sober home urine drug tests that were not payable by MassHealth, including tests that were medically unnecessary, not performed or properly authorized, and/or resulted from illegal kickback arrangements. According to the AGO, the fraudulent schemes resulted in over $4.7 million in false claims to MassHealth. 

Today, July 28, 2025, in Suffolk County Superior Court, Optimum Labs pleaded guilty and Owens admitted to sufficient facts for two separate sets of charges brought by the AGO in May 2022 and March 2025 in relation to the schemes, including three counts each of Medicaid False Claims, Larceny over $1,200, and Medicaid Kickbacks for both defendants.  

Because Optimum Labs is no longer in business and is unable to pay the $4.7 million that the Court found they owe to the Commonwealth, as part of the plea, the Court ordered the company to surrender $830,000. Owens was ordered to serve two consecutive sentences of 2.5 years in the Suffolk County House of Correction, which will be suspended for a probationary period of three years. While on probation, Owens will be barred from any involvement with MassHealth billing, sober homes, and laboratories, and is ordered to complete 150 hours per year of community service.  

In May 2022, the AGO secured indictments on charges alleging that between 2017 and 2021, Optimum Labs and Owens regularly submitted false claims to MassHealth for urine drug tests that were conducted for sobriety monitoring purposes, ordered by unauthorized prescribers and/or the result of illegal kickbacks. Under state regulations, providers are prohibited from billing MassHealth for testing related to sobriety monitoring, as such tests are medically unnecessary and thus, not payable by MassHealth. The AGO also charged Optimum Labs for engaging in an illegal kickback scheme in which it referred its urine drug tests to two other laboratories in exchange for a percentage of insurance reimbursements.  

In March 2025, the AGO secured indictments on charges alleging that after being placed on a MassHealth payment suspension, between October 2021 and May 2022, Optimum Labs and Owens engaged in another kickback scheme in which Optimum Labs referred urine drug tests to a new laboratory, Central Lab Partners, in exchange for a portion of related MassHealth reimbursements.  

This matter is representative of the AGO’s commitment to combatting MassHealth fraud, including the submission of false claims related to fraudulent urine drug tests. In December 2024, the AGO announced a $2 million settlement with a physician group for submitting false claims to MassHealth, including for medically unnecessary urine drug tests. Additionally, in March 2025, the AGO secured indictments against several other MassHealth providers in connection with alleged fraud and kickback arrangements that collectively resulted in over $7.8 million in false claims to MassHealth, including those involving fraudulent urine drug tests.  

This matter was handled by Assistant Attorneys General Heidi Lyn Gosule, Kevin O’Keefe, and Scott Grannemann, Investigations Supervisors Shelby Stephens and Joe Shea, Senior Healthcare Fraud Investigators William Welsh and Vanessa Asiatidis, and Investigator Kevin Todd, all of the AGO’s Medicaid Fraud Division. 

The AGO’s Medicaid Fraud Division is a Medicaid Fraud Control Unit, annually certified by the U.S. Department of Health and Human Services to investigate and prosecute health care providers who defraud the state’s Medicaid program, MassHealth. The Medicaid Fraud Division also has jurisdiction to investigate and prosecute complaints of abuse, neglect and financial exploitation of residents in long-term care facilities and of Medicaid patients in any health care setting. Individuals may file a MassHealth fraud complaint or report cases of abuse or neglect of Medicaid patients or long-term care residents by visiting the AGO’s website.  

The Massachusetts Medicaid Fraud Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $5,922,320 for federal fiscal year 2025. The remaining 25 percent, totaling $1,974,102 for FY 2025, is funded by the Commonwealth of Massachusetts.