California court rules Millennium Labs' insurer will not cover HIPAA investigation costs

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Millennium Laboratories was subject to a HIPAA investigation conducted by the Department of Justice. In 2012, the lab company filed a lawsuit seeking to require its insurer to cover the $5 million in costs incurred by the investigation, according to a Law360 report. Now, a Southern California District Court has ruled insurance company Allied World Assurance Company does not have to cover the claims, according to a JD Supra report.

The DOJ initiated the investigation of Millennium based on whistleblower allegations of unlawful business practices relating to false claims and kickbacks. Allied World Assurance argued it was not required to cover the lab company's costs because its policy had a defense costs exclusion, according to the Law360 report.

The District Court concluded Millennium's claims fell under the Allied World Assurance policy's "specific claims exclusion" standard, according to the JD Supra report. The court also rejected the lab company's attempt to recoup legal fees.

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