Last week’s enforcement actions saw another major case involving genetic testing as a Nashville federal grand jury charged eight people with Medicaid and Medicare fraud in a 40-count second superseding indictment on Aug. 5.
According to the U.S. Department of Justice (DOJ) announcement, the individuals charged, including the owner of a series of Tennessee-based labs known as Crestar Labs, LLC, were allegedly involved in a scheme in which marketers signed fake contracts and were paid kickbacks to target elderly beneficiaries of federal healthcare programs at senior health fairs, nursing homes, and other locations for their genetic material and urine analysis samples.
That material was then used in genetic testing approved by telehealth doctors who had no interaction with the patients. In many cases, the patients and the doctors actually treating them never received the test results, the DOJ alleges. Crestar Labs’ owner and the others involved in the scheme allegedly paid bribes and kickbacks for tests and doctor’s orders “without regard to medical necessity” and falsely billed Medicare and Medicaid more than $150 million, the DOJ statement adds.
Crestar’s owner faces a maximum of 10 years in prison for money laundering, if convicted, and all those indicted could see up to 10 years on Anti-Kickback Statute and fraud charges, as well as a maximum of five years in prison on a conspiracy to violate the Anti-Kickback Statute charge, the DOJ states.1
Other Lab and Testing-Related Cases from Last Week
In other key enforcement actions involving labs or diagnostic testing from last week:
Aug. 1: The owner of New York-based America’s Imaging Center, Inc. and the company itself were charged in an alleged Medicaid fraud scheme in which patients were forced to get invasive and medically unnecessary tests. According to the New York Attorney General’s office, the owner allegedly paid kickbacks to physicians in exchange for patient referrals. Those patients were then put through unneeded radiological tests and procedures, which were falsely billed to Medicaid. The owner faces a number of felony charges related to the alleged scheme.2
Aug. 5: Maryland-based pain management group Gonzaga Interventional Pain Management, its physician owner, and the owner’s son, who is chief executive officer of the clinic, agreed to pay $980,000 to resolve False Claims Act allegations involving billing for medically unnecessary urine drug tests (UDTs). Those tests allegedly involved two types of UDTs, presumptive and definitive, with presumptive tests determining the presence of a substance in the body, and the definitive test determining the presence of individual drugs and their amounts. However, instead of determining medical necessity on an individual basis, the clinic “used blanket orders that tested all patients for the same 22+ drug classes,” the DOJ states.3