The opinion
Supreme Court of Texas
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No. 25-0127
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Laboratory Corporation of America Holdings d/b/a Laboratory
Corporation of America,
Petitioner,
v.
The State of Texas and NPT Associates,
Respondents
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On Petition for Review from the
Court of Appeals for the First District of Texas
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JUSTICE BUSBY, dissenting.
Loss causation and materiality are distinct elements that a
legislature creating a statutory fraud claim may require. I agree with
the Chief Justice that the plain text of this statute requires loss
causation but not materiality to prove a claim of fraud by omission. Ante
at 4-6 & n.3 (Blacklock, C.J., dissenting). I therefore join his dissenting
opinion.
But I agree with the Court that the result in today’s case does not
bind the State to pay fraudulent claims in the future. Ante at 43. I write
separately to emphasize that the Court does not endorse LabCorp’s
reading of the billing regulations and agreements at issue.
According to LabCorp, these regulations and agreements merely
prohibit it from charging or billing a rate to certain classes of patients—
such as those with private insurance—that is less than the rate it bills
Medicaid patients. In its view, these rules do not prohibit it from
accepting full payments from those classes of patients that are less than
the payments it accepts from Medicaid patients.
I read some of the rules differently. For example, one regulation
makes it a sanctionable act to “submit[] . . . a [Medicaid] claim for
payment . . . for an item or service where the charges or costs for that
item or service were discounted for . . . privately insured persons.”
1 TEX. ADMIN. CODE § 371.1653(10) (emphasis added). This language is
not limited to charges billed for an item or service; it also includes costs
paid. Here, the State contends that the costs ultimately paid by
privately insured persons were discounted as a class, not just in one-off
charity cases.
Similarly, the manual to which LabCorp agreed requires that a
provider “will not bill the Medicaid program for services that are
provided or offered to non-Medicaid patients . . . discounted or reduced
in any fashion including, but not limited to, . . . advertised specials.”
(Emphasis added.) This requirement is expressly not limited to
advertised specials or offered rates; it also includes the rates at which
services are actually provided, which the State asserts were improperly
discounted here.
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If LabCorp continues these practices, “[n]othing . . . constrains
the State’s ability” to take action against alleged “regulatory violations
going forward.” Ante at 43.
J. Brett Busby
Justice
OPINION FILED: June 19, 2026
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