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CGx Testing and Kickbacks Remain Key Enforcement Targets

by , | Jan 1, 2023 | Enforcement-lca, Essential, Lab Compliance Advisor

In our latest roundup, schemes involving cancer genetic testing and kickbacks remain the most common, but there were some surprises.

As 2022 winds down, federal healthcare fraud enforcement activity has intensified in terms of both reported case volume and value. Not surprisingly, several of the most significant of the newly reported federal actions target clinical labs. In addition to the familiar themes of cancer genetic (CGx) testing and kickbacks paid by marketing firms to physicians for ordering tests and other services for Medicare beneficiaries not actually seen or evaluated for medical necessity, there were some surprises. Perhaps the biggest surprise targeted an oldie but goodie as far as false billing practices go, namely, billing what were essentially routine services as high-priced evaluation and management (E&M) services. Ambulance services also appeared on this month’s docket.

Here's a roundup of some of the significant cases reported from mid-November through the first week of December.

Nov 15: Missouri Lab Owner Convicted for Running Reference Test Billing Scheme

Dr. Franco Sicuro, 67, is looking at up to five years in prison and $3.1 million in restitution after pleading guilty to conspiring to falsely bill $3.8 million worth of lab tests. According to the Missouri U.S. Attorney’s Office, the scheme centered around Sicuro ‘s company, Advanced Geriatric Management (AGM), and Genotec Dx, another Sicuro-owned lab, to “bill insurance companies as a separate, ‘out-of-network’ lab.” In addition to being in the same building, AGM and Genotec shared lab equipment and staff. Genotec and AGM referred toxicology test orders from other companies associated with Sicuro to third-party labs while billing the payors at a far higher rate as if they had performed the tests themselves.1

Nov 16: Pharmacy Owners Plead Guilty to Misusing COVID Codes to Bill for Cancer Meds

Arkadiy Khaimov, 39, and Peter Khaim, 42, pled guilty to conspiracy to commit money laundering using New York-area pharmacies they either owned or controlled. According to the U.S. Department of Justice (DOJ), the pharmacies used so-called emergency override billing codes during the pandemic to submit fraudulent claims for expensive cancer medications. Sentencing is scheduled for May, with each defendant facing up to 20 years in prison.2

Nov 18: Florida Doctor Faces 10 Years for CGx and DME Kickback Fraud

A Florida-based doctor pled guilty to receiving kickbacks in exchange for ordering CGx tests, durable medical equipment (DME), and other items and services for CHAMPVA and Medicare beneficiaries. Using an Internet-based platform that didn’t allow him to do anything other than sign for these orders, Dr. Sean Patrick O’Rourke received $25 per patient by a company identified only as “Company # 1,” in exchange for signing the orders, according to the DOJ, pocketing $31,075 for generating more than $2.7 million in orders. In addition to forfeiting the money, O’Rourke faces up to 10 years in prison.3

Nov 23: Illinois Ambulance Company Settles Emergency Transport Fraud Claims for $302K

Illinois-based ambulance services company HealthOne Critical Care Transport Service, Inc. d/b/a MedicOne Medical Response (MedicOne), has agreed to shell out $302,124 to settle allegations of improperly billing Medicare for routine, non-emergency transportation of patients. According to the DOJ, MedicOne was pretty brazen and sometimes billed Medicare for emergency transportation of patients who actually drove themselves to routine medical appointments and even social outings.4

Nov 28: Pennsylvania Doctor Pays $86.5K to Settle E&M Services False Billing Charges

Pennsylvania doctor Musaddiq Nazeeri has settled charges of falsely billing Medicare for E&M services. The price tag: $86,506.30. According to the DOJ, Nazeeri billed for E&M services during patient encounters where the medical records showed that he did no more than administer a COVID-19 vaccination. However, the DOJ also went out of its way to note that the doctor cooperated with the investigation. (See our January 2023 Labs in Court5 to find out about a similar but much larger E&M services settlement that was reported last month.)6

Nov 29: Senior Care Owners Indicted for $2.9 Million Medicare Genetic Tests Scheme

A Missouri federal grand jury indicted the owners and operators of Kansas-based Senior Community Care LLC a/k/a Momentum Med Services, LLC for participating in a complex $2.9 million Medicare fraud scheme involving the marketing of genetic tests. Timothy A. Chin, 64, and Lauren M. Sword, 36, allegedly paid or received kickbacks and bribes to procure Medicare beneficiaries’ information and cheek swabs, which they subsequently referred for medically unnecessary genetic testing. Those referrals generated $2,927,706 of false claims submitted to Medicare, of which $861,399 were paid. In addition to conspiracy charges, the defendants face 22 counts of wire fraud.7

Dec 1: Brooklyn Couple Gets 3 Years Apiece for Diagnostic Testing Kickback Ripoff

A husband and wife from Brooklyn are heading to jail for three years after being convicted for taking part in a multi-million-dollar kickback scam. Tea Kaganovich, 50, and Ramazi Mitaishvili, 62, paid out over $18 million in kickbacks in exchange for referrals to their diagnostic testing facilities. The couple disguised the kickbacks as “legitimate business expenses” in tax form submissions to the Internal Revenue Service, while also under-reporting business income and claiming tax deductions to which they weren’t entitled, according to the DOJ.8

Dec 8: Ohio Marketers Charged with Telehealth Pharmaceutical Kickback Conspiracy

The feds charged James D. Feeley, 45, and his business partner for their role in a telehealth pharmacy kickback scheme costing federal healthcare benefit programs $64 million. The two, who  jointly owned and operated Ohio medical marketing companies, allegedly paid telehealth companies to recruit and pay doctors kickbacks for prescriptions. The marketing companies then directed those ill-gotten prescriptions to their pharmacy clients, with Feeley and his cronies receiving a cut of the money received from billing healthcare programs for the prescriptions. Feeley faces up to 10 years in prison for healthcare fraud conspiracy and up to five years for kickback conspiracy.9


  1. https://www.justice.gov/usao-edmo/pr/chesterfield-psychiatrist-admits-conspiracy-linked-health-care-fraud
  2. https://www.justice.gov/opa/pr/two-pharmacy-owners-plead-guilty-covid-19-money-laundering-and-health-care-fraud-case 
  3. https://www.justice.gov/usao-mdfl/pr/polk-county-doctor-pleads-guilty-receiving-kickbacks
  4. https://www.justice.gov/usao-sdil/pr/ambulance-company-settles-allegations-billing-medicare-unnecessary-non-emergency
  5. https://www.g2intelligence.com/january-2023-labs-in-court-two-usual-cases-two-unusual-ones/
  6. https://www.justice.gov/usao-mdpa/pr/medical-doctor-pay-8650630-resolve-civil-liability-alleged-violations-false-claims-act
  7. https://www.justice.gov/usao-wdmo/pr/lenexa-man-woman-indicted-29-million-medicare-fraud-conspiracy
  8. https://www.justice.gov/opa/pr/new-york-diagnostic-testing-facility-owners-sentenced-health-care-fraud-scheme
  9. https://www.justice.gov/usao-nj/pr/florida-man-charged-conspiring-pay-kickbacks-and-commit-health-care-fraud-64-million

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