Problems at Nutex, Part Two: Misunderstood by Investors and Facing a Revenue Cliff As Schemes Unravel

Initial Disclosure: After extensive research, we have taken a short position in shares of Nutex Health Inc (NASDAQ: NUTX). This report represents our opinion and is not financial advice. Do your own due diligence and don't take financial advice from strangers on the internet. Please read our full disclaimer at the bottom of this report.

This is part two of our investigation into Nutex Health.

Part one, published on Nov. 25, delves into allegations that Nutex’s founder and CEO, Thomas Vo, used the company to steal millions of dollars from partner ERs and physicians. Vo is accused of using the stolen funds to build Nutex into what it is today. The conflicts of interest that enabled Vo’s alleged wrongdoing still exist at Nutex today.

Part two, published on Dec. 16, analyzes Nutex’s recent jump in revenue, and evidence that it will mean revert as the company’s schemes unwind and payors seek to claw back fraudulent payments. It also examines Nutex’s accounting and what retail investors are missing.

Part three, coming soon, will focus on unethical and potentially illegal business practices at Nutex, which haven’t been reported on. Subscribe to our email list to be notified when it’s published.

Key Findings

• Revenue per patient visit increased 228% in one quarter, driven by alleged arbitration fraud by HaloMD, which handles all of Nutex’s arbitration claims. Nutex and HaloMD have a particularly close relationship, with their senior leaders even co-hosting a talk pitching HaloMD’s services to other healthcare providers.

• HaloMD is currently being sued in four federal circuits by insurers seeking to nullify fraudulent awards, claw back payments, and recover damages. HaloMD is accused of fraud and racketeering for its systematic abuse of federal and state arbitration systems, resulting in hundreds of millions of dollars in fraudulent awards for clients including Nutex.

• In the latest federal lawsuit, plaintiffs cite a Nutex claim as an example of HaloMD’s arbitration fraud, directly tying Nutex to the conduct at issue.

• The most recent lawsuit against Halo was filed by Blue Cross Blue Shield of Texas. Blue Cross Blue Shield is Nutex’s largest source of revenue, accounting for over 50% of payments in 2022, and Texas is Nutex’s largest market.

• Due to HaloMD’s alleged fraud, Nutex earned tens of millions of dollars in default arbitration judgments for claims that were ineligible for arbitration.

• Insurers have improved their systems for handling arbitration claims and fighting abuse, leading to a recent decline in awards and an increase in ineligible claims being rejected.

• Former employees accuse Nutex of engaging in medical billing fraud to inflate bills and overcharge payors.

• Nutex physicians accuse the company of diverting money from minority owners of ERs to “support the share price”. This scheme could inflate earnings by millions of dollars.

• Nutex previously inflated revenue and receivables in 2022 when the company went public. Over the following year, receivables were marked down by half, which the company buried in the footnotes of a 10-Q and not disclosed in annual filings.

• CMS data shows that at least 68% of arbitration claims are made against self-funded plans, meaning that employers bear the majority of the costs from inflated arbitration awards. This increases the odds of arbitration reform, and risks Nutex’s future revenue as employees are directed away from Nutex facilities and to in-network providers that don’t rip them off.

• Approximately 20-22% of cash and receivables do not actually belong to Nutex shareholders. Instead, they sit inside a maze of VIEs, affiliates, and partner-owned entities that are consolidated into financials but do not belong to Nutex shareholders. Based on their online postings, promoters of the stock appear to be unaware of this detail.

“A lot of their wins originally came from default. They just won because the payors could not keep up with all of the traffic that was coming from HaloMD.”

– Roger T, Expert in medical billing and owner of a medical billing company

Introduction

Nutex Health, Inc. (NASDAQ: NUTX) is a healthcare company that owns and operates a collection of freestanding emergency rooms (FSERs), which the company calls “micro-hospitals”.

Nutex was founded in 2011 by Thomas Vo, who is the current CEO, Chairman, and the largest shareholder. The company is headquartered in Houston, Texas, and has 24 healthcare facilities across 11 states.

Reverse Merger with an OTC Company

Nutex went public in April 2022, through a reverse merger with Clinigence Holdings, which was listed on the pink sheets (OTCPK: CLNH). Two and a half years earlier, in October 2019, Clinigence itself went public via a reverse merger. Concurrent with the reverse merger, Nutex uplisted to The Nasdaq Capital Market with the ticker symbol NUTX.

Rollercoaster Share Price

After going public, Nutex’s share price experienced significant volatility as the company grappled with regulatory changes and significant markdowns of accounts receivable.

Over the past 12 months, NUTX shares have surged 425%, rallying from $35 to over $170 per share.

This impressive rally is due largely to a sharp increase in accounts receivable and management’s plan to open new freestanding ERs. Management has repeatedly missed its targets for opening new ERs, but investors appear to be optimistic that the company will be able to execute on its plans for growth.

Expensive Out-of-Network Provider

Nutex operates as an out-of-network provider and has no contracts with insurers:

source: Nutex 2024 10-K

source: Nutex 2024 10-K

As an out-of-network provider, Nutex typically charges higher rates than comparable in-network providers. 94% of Nutex’s revenue comes from private insurers, with the remainder from Medicare and Medicaid, workers compensation, and self-pay patients.

source: Nutex 2024 10-K

To maximize profits, Nutex strategically locates its ERs in areas where there is a high concentration of persons with private insurance and a low concentration of people with no insurance. Many Nutex facilities also do not accept Medicare or Medicaid, which further filters out less profitable patients.

Temporary Revenue Spike Driven by Ineligible Claims and Alleged Arbitration Fraud

In one quarter, Nutex saw a staggering +228% jump in revenue per patient visit, from $1563 to $5122. This dramatic increase is attributed to alleged arbitration fraud and awards on ineligible claims.

As revenue has surged, receivables have ballooned 6x in one year, from $60 million to over $380 million:

At the same time, the number of patient visits has remained relatively flat, with a declining rate of growth:

Inflated Awards and Awards for Ineligible Claims

Nutex’s arbitration claims are handled entirely by HaloMD, which is being sued in four federal circuits for fraud and racketeering related to its arbitration practices. Insurers accuse HaloMD and its founders of systematically exploiting weaknesses in the arbitration system to defraud insurers.

Insurers are currently suing HaloMD in four federal circuits for fraud and racketeering:

• Aug. 28, 2025: Blue Cross Blue Shield of Texas v. HALOMD, LLC, 5:25-cv-00132, (E.D. Tex.)
• July 7, 2025: Anthem Blue Cross Life and Health v. HaloMD LLC, 8:25-cv-01467, (C.D. Cal.)
• June 10, 2025: Community Insurance Company v. HaloMD, LLC, 1:25-cv-00388, (S.D. Ohio)
• May 27, 2025: Blue Cross Blue Shield of Georgia v. HaloMD, Inc., 1:25-cv-02919, (N.D. Ga.)

Leading the fight against arbitration fraud and abuse is Blue Cross Blue Shield, which is also Nutex’s largest source of revenue:

source: Nutex Health, Lender Presentation, February 2022, slide 25

Nutex Claim Cited as an Example of Blatant Fraud

BCBS of Texas, Nutex’s largest source of revenue in its biggest state, recently sued HaloMD for fraud and racketeering and cited a Nutex arbitration claim as an example of blatant fraud and inflated awards.

NB Physician Group, PLLC, formerly known as I35EP, PPLC is the physician group at Nutex’s New Braunfels ER & Hospital. Nutex CEO Thomas Vo, created the company and is listed as its manager.

source: Blue Cross Blue Shield of Texas v. HALOMD, LLC, 5:25-cv-00132, (E.D. Tex.)

Despite the claim being ineligible for federal arbitration, HaloMD proceeded with arbitration anyway and won an award nearly 5x the median in-network rate.

source: Blue Cross Blue Shield of Texas v. HALOMD, LLC, 5:25-cv-00132, (E.D. Tex.)

Hundreds of Millions of Dollars Awarded for Ineligible Claims

Insurers allege that while handling Nutex’s arbitration claims, HaloMD perpetrated multiple schemes to deliberately overwhelm the arbitration system with ineligible claims to win default awards for multiples of what in-network providers are paid.

Insurers claim that these fraudulent schemes resulted in “hundreds of millions (if not billions) of dollars” in improper arbitration awards.

source: Blue Cross Blue Shield of Texas v. HALOMD, LLC, 5:25-cv-00132, (E.D. Tex.)

“They were sued because they overwhelmed Blue Cross Blue Shield. They sent ineligible claims, and they had no time to gather themselves to reply back. The deadlines weren’t met. So, they were being paid on defaults for claims that weren’t even eligible for the process to begin with.”

– Roger T, Expert in medical billing and owner of a medical billing company

“Hundreds of Thousands” of Disputes for Ineligible Claims

A small number of arbitration companies are accused of exploiting the system, with HaloMD being one of the most prominent abusers, being responsible for 10% of all arbitration claims in 2024.

source: Blue Cross Blue Shield of Texas v. HALOMD, LLC, 5:25-cv-00132, (E.D. Tex.)

Overwhelmed Payors by Flooding Systems with Stockpiled Claims, Including Ineligible Claims

Why would HaloMD submit so many ineligible claims? It appears to be part of their scheme to overwhelm insurers’ systems and staff. One of HaloMD’s tactics was to stockpile claims and then flood payors with submissions around Thanksgiving and Christmas, when staffing was low and technical teams weren’t available to handle the attack on their systems.

They chose to flood the payors’ systems around holidays, when they were understaffed and technical teams would be least able to respond to problems caused by the sudden influx of documents. The ineligible claims served to further overwhelm payors and increase the chances of winning default awards.

This is why HaloMD is being sued for fraud and racketeering, and it’s why Nutex’s cash and receivables are at risk. They deliberately exploited the system to win large awards on claims they knew were ineligible, resulting in hundreds of millions of dollars in invalid payments. They also won inflated awards for eligible claims because HaloMD’s schemes made them unable to respond in time to arbitration claims.

Arbitration Fraud and Abuse is Being Curtailed

Recent IDR data shows that the arbitration scheme is already unwinding with more ineligible claims getting rejected, payors winning more disputes, and more claims being withdrawn. Without inflated arbitration awards, Nutex faces a revenue cliff as it returns to earning a fair market rate for its services. Adding to Nutex’s troubles, payors are delaying payments and seek to claw back improper awards. This will likely lead to significant revenue markdowns and legal liabilities for Nutex as they battle with the insurance companies who are the source of over 95% of revenue.

Over the past year, insurance companies have improved their systems to combat arbitration abuse and the fraudulent practices of companies like HaloMD. As a result, insurers are winning more arbitration disputes and have become more effective at getting ineligible claims rejected.

– Roger T, Expert in medical billing and owner of a medical billing company

Nutex Employees Were Pressured to Improperly Code Medical Bills

Multiple former employees allege that NUTX’s CEO personally pressured employees to improperly code medical bills in order to overcharge payors and inflate revenue.

According to former employees, NUTX CEO, Thomas Vo, spent considerable time in the office of Tyvan LLC, Nutex’s billing subsidiary. While in the billing office, Vo personally pressured employees to miscode medical bills.

Question: “How often did Vo encourage or pressure employees to miscode things?”

Answer: “Oh, every chance he got. Every time he stepped foot into the office. …at least 10 times a week”

– Interview with former Nutex employee R

Tyvan’s medical coders were Certified Professional Coders (CPCs), an industry standard for medical coding professionals. They were responsible for coding medical bills in a way that accurately reflected the services provided to patients, and they were uniquely qualified to do so.

Former employees allege that Nutex engaged in a number of illegal billing practices, including:

• Swapping primary and secondary diagnoses in order to increase reimbursement rates
• Inflating the patient acuity to justify higher reimbursement rates
• Billing for services that were not provided or misrepresenting the services provided

“Typically, if something is secondary, it should not be coded in the primary spot. But it was encouraged to use the most severe for reimbursement purposes” - former Nutex employee

Unlike Vo, Tyvan’s medical coders were trained and certified to ensure that medical bills were coded accurately and in compliance with industry standards. Despite this, former employees alleged that Vo repeatedly directed employees to change how they coded to systematically increase medical bills.

I told him I could not bill something that did not happen. Then, [Vo] said, “What if we billed it and then checked?” - former Nutex employee

These are serious allegations which we confirmed through interviews with multiple former employees.

source: Glassdoor review of Tyvan from Dec. 2022

Retail Investors Don’t Realize They’re Buying Into an Illusion

While Nutex touts a “strong balance sheet”, retail investors are missing a critical detail: large portions of the company’s reported cash and receivables do not actually belong to Nutex shareholders. Instead, they sit inside a maze of VIEs, affiliates, and partner-owned entities that are consolidated into financials but do not belong to Nutex shareholders.

The assets investors believe support Nutex’s valuation are, by design, structurally walled off. The market, unaware or uninterested in the fine print, continues to treat these numbers as though they’re real, liquid, and fully owned. They’re not.

Changes in Revenue Recognition

Nutex recently changed its revenue estimates based on its inflated arbitration awards. The company assumed it can not only continue to not only win arbitration awards but collect on them too. This is a faulty assumption that requires insurance companies to bend over and willingly pay Nutex inflated awards, many of which are allegedly fraudulent.

Nutex recognizes revenue when services are provided to patients, but actual payment isn’t received until months later.

If these assumptions are shown to be false, Nutex will be forced to restate earnings and reduce accounts receivable. We estimate that receivables could be marked down by up to $300 million.

Summary

With allegations of arbitration fraud, revenue inflation, and physicians accusing the CEO of criminal wrongdoing, Nutex is a high-risk investment with significant downside risk. We encourage investors to exercise caution and conduct thorough due diligence before considering an investment in Nutex.

Unfortunately for Nutex, the insurers fighting arbitration fraud and abuse, BCBS, are also the company’s largest payors. We believe it’s highly likely that Nutex will be named in future lawsuits. It’s also likely that Nutex will be forced to restate earnings, reduce accounts receivable by up to $300M, and pay millions of dollars in penalties and damages.

We believe Nutex will likely be forced to mark down revenue, and receivables, while also facing significant claw backs and legal expenses. Nutex is facing a potential repeat of 2022, when the company marked down receivables by half, sending the stock plummeting over 80%.

Without their schemes to defraud payors and patients, Nutex may suffer the same fate as its peer, Adeptus Health, which filed for bankruptcy in 2017 and again in April 2025. Or, Nutex will follow in the path of American Physician Partners, one of the largest operators of ERs and FSERs, which filed for bankruptcy in September 2023.

“[Vo] has to have a personality disorder, …he reminds me of this program, American Greed, it’s kind of like that. I don’t know if he’s a crook or if he’s some kind of psychopath.”

– Physician A, former Nutex medical director

While HaloMD isn’t the focus of this report, it is worth further investigation for anyone serious about understanding Nutex’s risks. HaloMD is owned and operated by a former Vegas stripper, with a colorful past. She has financial ties to a person arrested for counterfeiting and was a state’s witness in a capital murder case, where the defendant was a client/boyfriend of hers. He was convicted and sentenced to death for robbery and double homicide.

• Nutex Health Inc
• NUTX