Former Executives Accuse Health Technology Firm of Fraud

Two former executives of the health technology firm NantHealth claim in a recently filed lawsuit that the company made fraudulent claims about the reliability of its system, which links patient information gathered by medical devices.

The executives also allege that NantHealth, which is owned by a billionaire doctor, 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 counters that the former employees had 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 Times reports that the doctor’s business relationships have come under scrutiny before. More than ten years ago, a Times investigation found that a drug company then headed by Dr. Soon-Shiong had a financial relationship with Premier, a major purchaser of supplies for hospitals nationwide that was supposed to be free of such conflicts.

In the wrongful-termination suit, the two former NantHealth executives say they were hired in 2014 in connection with a planned initial sale of public stock, according to the Times. They claim, however, that they soon 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 found that the system was “10 years behind in technology capabilities,” the lawsuit charges. In addition, the lawsuit charges, an executive at a hospital using NantHealth’s system was so troubled by its performance that he threatened to terminate its use and alert other hospitals to the problem.