In the U.S., genetic testing has skyrocketed. For Medicare, the public insurance program for elderly and disabled Americans, payouts for genetic tests jumped from $480 million in 2015 to $1.1 billion in 2018, a Reuters analysis found.
Janet Putrah, a retired university IT supervisor, poses for a photo in her home in Mankato, Minnesota, U.S. September 23, 2019. REUTERS/Nicholas Pfosi
In all, more than 300 federal investigations, conducted by multiple law enforcement agencies, are examining genetic testing fraud schemes, said a law enforcement official who spoke on condition of anonymity because the inquiries are not yet public. The investigative crush was sparked in part by unusual Medicare billing data patterns that started to emerge in 2015.
But many of the lab tests are not relevant to the patient’s history, and some of the doctors sign off on the results without conferring with the patient, said investigators familiar with the operations and patients interviewed by Reuters. Suspect companies pocket thousands, with a cut going to doctors, but the seniors get little, if any, benefit, investigators say.
Rebecca Kinney, the acting director for the Office of Healthcare Information and Counseling, part of HHS, said seniors should be on the lookout for red flags and any genetic tests should be ordered by their own doctors. “The thing that we really try to tell people to pay attention to in any kind of marketing scheme or fraud scheme are the phrases ‘Free to you’ or ‘Free if you have Medicare,’ “ she said.
“They paid $12,000 they shouldn’t have paid,” Stone said of Medicare, calling the test “wasted taxpayer dollars.”Another condo resident, Arlene Pallack, said her Humana Medicare Advantage plan in 2018 paid for $2,225.17 of the $4,625.42 Clio charged for her cheek swab. Humana is concerned about the “growing health care issue” of testing fraud, a spokeswoman said, and targets misuse.
Victoria Nemerson, Clio’s general counsel, said in a statement that the company’s testing is proper and that it has “extensive experience providing important testing and laboratory services for physicians and patients.” She added: “We commit substantial time and resources to meeting our legal duties.
“I’m worried about my Medicare information and my Social Security out there. I thought ‘My gosh, they’ve got all of this information,’ “ Falkenberg said. Butman has since gone back to those from whom she collected cheek swabs to warn them the billings for the tests might be improper. She said she has filed complaints with several state attorneys general against MyDNACancerTesting and some of the labs she fears were overbilling.Jerry Pfeister, the founder of MyDNACancerTesting, told Reuters he contracted with a different company which dealt with the labs, but his company did not interact with labs or doctors.
Perry Holloway, a company principal, said he was unaware of any problems. His attorney Samy Khalil said his client “did not know of or intentionally participate in any fraud.” In a handful of cases, the patients who had DNA samples sent to Clio or Spectrum said they never spoke with a doctor about why the cancer or pharmacogenetic tests were medically necessary. Moreover, when test results were completed, they were mailed directly to patients’ homes. That is not the norm, say doctors and medical experts. Usually, the ordering physician receives results first, then reviews them with the patient.
Clio Laboratories and a cluster of companies – including Elite Medical Laboratories, 360 Laboratories and billing company Laboratory Experts – are connected to Jordan Satary, an entrepreneur in his mid-twenties whose father once ran a lab that went bust, records show. Elite Medical Laboratories, for instance, lists its lab director as Stanley Wu, the former Confirmatrix lab director. Wu hung up on Reuters when it sought his comment and did not respond to an email seeking comment.
Son Jordan is listed in an April 2019 document as the CEO and CFO of a medical billing operation, GNOS Medical, which is located in the same business plaza with Elite and Clio. It has since changed its name to Laboratory Experts, public records show. Orthopedic surgeon Dr. Mitchell G. Cohen pleaded guilty in November 2015 to filing a false tax return in connection with an illegal kickback scheme, cooperated with the government’s investigation, and later served more than eight months in a halfway house in central California through March 2019, court records show. Cohen was not charged with making an illegal kickback, but pleaded guilty to making a false tax return in a case federal authorities said involved kickbacks.
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