New Bedford Lab Fined in $4.7M MassHealth Scam

Boston, MA — Optimum Labs, a New Bedford–based clinical laboratory, and its owner, William Owens, have pleaded guilty to orchestrating fraudulent billing schemes involving MassHealth—Massachusetts’ Medicaid program. The schemes involved submission of false claims for urine drug tests associated with sober homes, resulting in more than $4.7 million in fraudulent claims. Mass.govOffice of Inspector General

Details of the Fraud Schemes

• Unlawful Sober Home Testing Claims Optimum Labs billed for drug tests used to monitor sober home residents’ sobriety—tests that are considered medically unnecessary and therefore not covered by MassHealth. In many instances, the tests weren’t performed, lacked proper authorization, or were the product of kickback arrangements. Mass.govOffice of Inspector General

• Kickback Arrangements Optimum Labs referred urine drug testing to other labs in exchange for a cut of the reimbursements—arrangements that breached state anti-kickback laws. Mass.gov1420 WBSMOffice of Inspector General

Legal Outcomes & Consequences

• Guilty Plea & Restitution July 2025, Optimum Labs pleaded guilty in Suffolk County Superior Court. While the fraud totaled over $4.7 million, the lab, now defunct, was ordered to surrender $830,000 in restitution.Mass.gov

• Owner’s Probation and Restrictions: William Owens, aided by his guilty plea, faces two consecutive suspended sentences (2.5 years each), to be served on probation for three years. During that time, he is banned from billing MassHealth, participating in sober home operations, or engaging with any laboratories. He must also complete 150 hours of community service annually during probation.Mass.gov

What This Means for Behavioral Health Providers

For providers in the behavioral healthcare space, particularly those tied to sober living and substance use treatment:

Key Lesson	What to Do
Understand billing eligibility	Confirm that services rendered—such as drug testing—are medically necessary and authorized.
Avoid incentive-based referrals	Referral arrangements tied to financial gain can be deemed illegal kickbacks.
Actively audit billing practices	Ensure all claims submitted to Medicaid or MassHealth are accurate, documented, and compliant.
Deploy compliance safeguards	Having robust compliance protocols and audits—not just good intentions—can deter, detect, and defend against fraud allegations.

Bottom Line

The Optimum Labs case serves as a critical warning that even well-meaning operations can trigger legal consequences when billing requirements and regulations are not properly understood and followed. Behavioral health providers must maintain vigilant compliance—especially around services like drug testing and program referrals—to protect both their reputation and their mission.