Opinion

Laboratory Corporation of America Holdings D/B/A Laboratory Corporation of America v. the State of Texas and Npt Associates

Court
Texas Supreme Court
Filed
Jun 19, 2026
Status
Published
Author
Busby
On the bench
Hawkins; Lehrmann; Devine; Bland; Huddle; Young; Sullivan; Blacklock; Busby; Busby
Cited by
0 cases

The opinion

Supreme Court of Texas

══════════

No. 25-0127

══════════

Laboratory Corporation of America Holdings d/b/a Laboratory

Corporation of America,

Petitioner,

v.

The State of Texas and NPT Associates,

Respondents

═══════════════════════════════════════

On Petition for Review from the

Court of Appeals for the First District of Texas

═══════════════════════════════════════

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.

2

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

3

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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