New Bedford Lab Fined $830K in Sober Home Testing Scam

BOSTON (WBSM) — A New Bedford man has been sentenced to prison and his clinical laboratory ordered to pay over $800,000 in restitution after pleading guilty to MassHealth fraud and a kickback scheme involving urine tests for sober home residents.

According to Massachusetts Attorney General Andrea Campbell, William Owens was sentenced to two consecutive sentences of 2.5 years in the Suffolk County House of Correction (suspended for three years) and his New Bedford-based Optimum Labs, Inc. was ordered to pay $830,000 in restitution.

Optimum Labs pleaded guilty today in Suffolk Superior Court and Owens admitted sufficient facts to support two separate sets of charges that the Attorney General’s Office brought in May 2022 and March 2025, including three counts each of Medicaid false claims, larceny over $1,200, and Medicaid kickbacks for both the lab and Owens.

Get our free mobile app

What Was the Fraud and Kickback Scheme?

Campbell said the charges were “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.

The A.G.’s Office said the schemes resulted in over $4.7 million in false claims to MassHealth, but because the company was out of business and unable to provide that full amount, $830,000 was seized as restitution.

Owens’ two consecutive 2.5-year sentences were suspended for a probationary period of three years, during which he will be “barred from any involvement with MassHealth billing, sober homes and laboratories,” according to the A.G.’s Office, and he must complete 150 hours per year of community service.

The A.G.’s Office said 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.”

Why Are These Drug Tests Prohibited?

They said providers are prohibited under state regulation from billing MassHealth for testing related to sobriety monitoring, as they are considered medically unnecessary. Also, Optimum Labs was involved 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.”