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Nationwide Takedown Headlines Busy Enforcement Week

by | Jul 27, 2022 | News, Open Content

Last week saw a takedown of $1.2B worth of alleged fraud schemes involving labs, genetic testing, and telemedicine.

Last week was an especially busy one in terms of enforcement actions involving the healthcare industry, with the biggest story being the July 20 announcement of criminal charges against 36 defendants around the US allegedly involved in various fraudulent genetic testing, telemedicine, and durable medical equipment schemes worth a total of $1.2 billion.

Those charged include owners and executives of clinical labs, medical professionals, marketing organizations, durable medical equipment companies, and a telemedicine company executive, the U.S. Department of Justice (DOJ) said in a statement. The alleged schemes mainly involved lab owners and operators paying illegal bribes and kickbacks to induce medical professionals, who were working with fraudulent telemedicine and digital medtech companies, to refer patients to the labs.

Of the $1.2 billion lost in the alleged schemes, telemedicine accounted for the largest share, $1 billion, the DOJ stated, adding that it had “seized over $8 million in cash, luxury vehicles, and other fraud proceeds” in connection with the nationwide coordinated enforcement action. On the same day the DOJ announced the action, the Centers for Medicare & Medicaid Services (CMS), Center for Program Integrity (CPI) also announced that it had taken “administrative actions against 52 providers involved in similar schemes.”1

For more on how labs can protect themselves from suspect partnerships with telemedicine companies, see this advance article from our upcoming August 2022 issue of Lab Compliance Advisor.

In addition to the big takedown, there were also a number of other enforcement actions announced last week involving labs:

July 20: Inform Diagnostics, Inc., a clinical lab headquartered in Texas that was previously called Miraca Life Sciences, Inc., settled allegations that it falsely billed for medically unnecessary testing for $16 million.2

July 20: An alleged $10 million genetic testing scheme led to a physician assistant being charged with one count of healthcare fraud and six counts of making false statements for his role. The assistant allegedly signed fake prescriptions for unnecessary cancer genomic and pharmacogenetic testing for hundreds of North Carolina beneficiaries. If convicted, he could face up to 10 years in prison and a $250,000 fine for the fraud charge and up to five years in prison and a $250,000 fine for each of the false statement charges.3

July 22: Two clinical labs and their owners settled false claims allegations relating to unnecessary genetic testing, agreeing to pay $5.7 million. Metric Lab Services LLC and Metric Management Services LLC and Spectrum Diagnostic Labs LLC, along with two of their owners and operators, allegedly worked with various marketers in the scheme. According to the DOJ, the marketers allegedly solicited genetic testing samples from Medicare beneficiaries, arranged to have a physician sign off that the tests were medically necessary, and then Spectrum and Metric processed and billed the tests to Medicare, paying the marketers a share of the reimbursement.4

Enforcement actions involving genetic testing schemes have become more common in recent years. Read more in a recent issue of National Lab Reporter.


  1. https://www.justice.gov/opa/pr/justice-department-charges-dozens-12-billion-health-care-fraud
  2. https://www.justice.gov/usao-ma/pr/inform-diagnostics-agrees-pay-16-million-resolve-false-claims-act-allegations-medically
  3. https://www.justice.gov/usao-wdnc/pr/physician-assistant-indicted-role-10-million-medicare-fraud-scheme
  4. https://www.justice.gov/opa/pr/metric-lab-services-metric-management-services-llc-spectrum-diagnostic-labs-llc-and-owners