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Genetic testing labs and health care fraud: What happened?

The Department of Justice (DOJ) recently sent federal agents to raid at least four genetic testing labs to gather evidence in connection with allegations of health care fraud.

Why the investigations?

The government states investigations were triggered by the skyrocketing use of genetic testing to determine a testing subject’s risk of developing diseases like cancer. Medicare received $480 million for claims in 2015. In 2018 that number jumped to $1.1 billion.

What were the allegations?

The government states the genetic testing labs were part of a scheme that used marketers to contact elderly, Medicare beneficiaries. These beneficiaries would provide the labs with a genetic sample, often through use of a cheek swab, which the lab would allegedly test for genetic markers that indicate a predisposition for cancer. The test would also provide information about which drug treatments may work best for the participant.

The DOJ claims the labs had bribed physicians to refer patients and sign off on the medical necessity of the tests. Medicare generally covers lab testing costs connected to medical necessity. If the allegations are true, the DOJ states the labs filed claims for payment with Medicare for services it knew were medically unnecessary.

Has the government concluded its probe into genetic testing labs and health care fraud?

The DOJ states it has conducted over 300 federal investigations for health care fraud in connection to the use of genetic testing. These charges are the most recent, but unlikely the last.

Laboratories face increased government scrutiny. Practices must be in line with applicable law or the government will investigate and potentially pursue criminal charges. Those who are the subject of an investigation have options. An attorney experienced in the niche area of health care fraud for diagnostic and reference labs.