35 Charged in Alleged $2.1 Billion Genetic Testing Fraud Scheme

Fraud and Compliance Update

10/4/2019 (AHLA)

Nearly three dozen individuals across five federal districts are facing charges for their alleged roles in defrauding Medicare of more than $2.1 billion for expensive cancer genetic testing that was medically unnecessary, the Department of Justice (DOJ) announced September 27.

The 35 individuals are associated with dozens of telemedicine companies and genetic testing laboratories and include ten medical professionals, DOJ said in a press release.

A coordinated federal investigation of DOJ’s Criminal Division, the Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation targeted the alleged scheme, which involved laboratories paying illegal kickbacks and bribes to medical professionals working with fraudulent telemedicine companies in exchange for referrals of Medicare beneficiaries for the costly cancer genetic tests, prosecutors said.

Defendants allegedly paid doctors to prescribe the testing without any patient interaction or only a brief conversation over the phone. The test results often were not provided or were worthless, DOJ alleged.
Certain defendants, including CEOs and CFOs, allegedly controlled a telemarketing network that targeted elderly or disabled patients, convincing them to sign up for the unnecessary genetic tests.

“The scope and sophistication of the health care fraud detected in Operation Double Helix and the related Operation Brace Yourself is nearly unprecedented,” said U.S. Attorney for the Southern District of Georgia Bobby L. Christine.

Meanwhile, the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity announced administrative action against cancer genetic testing companies and medical professionals who submitted more than $1.7 billion in Medicare claims.

“CMS continues to use a comprehensive and aggressive program integrity approach that includes fraud prevention, claims review, beneficiary education, and targeting high-risk areas of the federal healthcare programs with new tools and innovative demonstrations,” said CMS Administrator Seema Verma.

The charges were brought in federal districts in Florida, Louisiana, Georgia, and Texas.

For example, in the Southern District of Florida, Richard Garipoli, who owned Lotus Health LLC, a telemedicine company, was charged with billing Medicare more than $326 million for medically unnecessary cancer genomic tests. Medicare paid more than $84 million of those claims.

Nineteen individuals were charged in the Southern District of Georgia, including two “telemedicine” physician recruiters, seven physicians, two nurse practitioners, two individuals who brokered the sale of physician orders, one company that brokered the sale of physician orders, and four durable medical equipment companies. Defendants allegedly were responsible for more than $400 million in genetic testing, durable medical equipment, and pain cream billing to Medicare, prosecutors said.

Midwest Strike Force Action Nets Charges Against 53 for Alleged $250 Million in Medicare, Medicaid Fraud

Fraud and Compliance Update

10/4/2019 (AHLA)
Health care fraud and enforcement efforts in Detroit, Chicago, and Minnesota resulted in charges against 53 individuals for their alleged roles in schemes to defraud Medicare and Medicaid by billing for procedures that were medically unnecessary or not provided and for prescription medications that were never purchased or distributed, the Department of Justice (DOJ) announced September 27.

In the Eastern District of Michigan, 20 individuals are facing charges for their alleged involvement in schemes that resulted in $144.8 million in fraudulent Medicare billings, prosecutors said in a press release. In the Northern District of Illinois, 12 individuals were charged in alleged bids to defraud Medicare of more than $103 billion. Seven of the those charged in the two federal districts were doctors or medical professionals.

Also, in Minnesota, 21 defendants, including two medical professionals, were charged with defrauding Medicaid of nearly $3 million.

“Today’s action in the Midwest are further proof of the Department’s steadfast commitment to investigating and prosecuting those who put their personal greed above the public good,” said Assistant Attorney General Brian A. Benczkowski of DOJ’s Criminal Division.

The indictments include allegations only. Defendants are presumed innocent until proven guilty in court.