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Lawsuit Accuses Health Technology Firm of Fraud

Jan 21, 2015

A wrongful-termination filed by two former executives of NantHealth, a health technology firm, alleges the company made fraudulent claims about the reliability of its system, which links patient information gathered by medical devices.

The suit also alleges that NantHealth may have used donations to attract federal funds so a hospital could buy its products. The wrongful-termination lawsuit was filed in federal court in Panama City, Florida, last week, The New York Times reports. NantHealth says the fired executives demanded $2 million to prevent them from spreading false information about the company.

Dr. Patrick Soon-Shiong, the surgeon and entrepreneur who owns NantHealth, is also a part owner of the Los Angeles Lakers basketball team. The doctor’s business relationships have come under scrutiny before, the Times reports. A Times investigation more than ten years ago found that a drug company headed by Dr. Soon-Shiong had a financial relationship with Premier, a major purchaser of supplies for hospitals nationwide, though Premier was supposed to be free of such conflicts.

In their lawsuit, the former NantHealth executives say they were hired in 2014 to work on a planned initial sale of public stock. They say they quickly discovered that the company’s medical data gathering system did not work well and that NantHealth’s claims about it were fraudulent and misleading. A company-sponsored review last year revealed that the system was “10 years behind in technology capabilities,” the lawsuit charges. The lawsuit also charges that an executive at a hospital using NantHealth’s system was so troubled by the system’s performance that he threatened to terminate its use and alert other hospitals, according to the Times.

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