DOJ charges 35 people in $2.1B Medicare genetic testing fraud scheme

Dive Brief:

The Department of Justice unveiled charges Friday against 35 people, alleging a variety of telemedicine and cancer genetic testing laboratories (CGx) took part in a scheme that referred seniors for medically unnecessary tests, costing Medicare $2.1 billion.
In tandem, CMS announced it took adverse administrative action against CGx testing companies and providers who filed more than $1.7 billion in claims to Medicare.
The action comes after the HHS Office of Inspector General warned the public in June of an ongoing genetic testing scam in which Medicare beneficiaries were offered "free" genetic tests as a way to gather their personal data for identity theft or fraudulent billing.

Dive Insight:

The federal enforcement action involved CGx labs that allegedly offered kickbacks and bribes for referrals from providers working with fraudulent telemedicine companies.

DOJ claims the defendants controlled a telemarketing scheme affecting hundreds of thousands of elderly patients, with the genetic tests often not even being provided to patients or being of any use to their actual doctors.

"The defendants are alleged to have capitalized on the fears of elderly Americans in order to induce them to sign up for unnecessary or non-existent cancer screening tests," U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida said in a statement. "The genetic testing fraud schemes put personal greed above the preservation of the American health care system."

Genetic testing fraud has also drawn the attention of Congress. In August, a group of senators wrote to HHS asking for more information on scams proliferating across the country.

"This action is a huge victory, putting an end to this massive scam operation. We need Congress, HHS and DOJ all working together to protect seniors from Medicare fraud." Sen. Bill Cassidy, R-La., one of the senators who wrote to HHS, told MedTech Dive in a statement.

Defendants were charged in multiple districts, including the Southern and Middle Districts of Florida, the Eastern and Middle Districts of Louisiana, the Southern District of Georgia and the Northern District of Texas.