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Urine Drug & Genetic Testing Remain Top Enforcement Targets

by Rachel Muenz | May 3, 2023

In an analysis of enforcement actions from the end of 2022 to early spring 2023, cases involving urine drug testing were the most prevalent.

Urine sample in container on table with paperwork for urine testing. Stock image. Urine drug testing concept. — iStock, Olga Ostapenko

Despite some lulls in laboratory-related enforcement actions early in 2023, several high-profile cases have been announced by the U.S. Department of Justice (DOJ) since G2 Intelligence’s last Enforcement Scorecard report in our January 2023 Lab Compliance Advisor.¹ Most of these cases involved unnecessary urine drug or genetic testing, reflecting recent enforcement trends and showing that toxicology and genetic testing labs continue to be a target for enforcement agencies.

One interesting item to note in looking at cases from the end of last year to early spring 2023 is the lack of actions involving COVID-19 testing—only two COVID-19-testing-related cases were announced over the period, until April 20, when the DOJ announced a major crackdown on COVID-19-related fraud. Of the 18 individuals charged in the alleged schemes, one was a lab owner accused of billing for unnecessary COVID-19 add-on tests and some of the first charges relating to over-the-counter (OTC) COVID-19 tests were also included.²

Announced April 5, the biggest case not involving COVID-19, genetic, or urine drug tests related to medical device company Magellan Diagnostics, Inc. In that case, three former executives from the company received four charges each relating to hiding “a device malfunction” that allegedly caused inaccurate lead test results for thousands of people.³

Here’s a roundup of some of the significant cases reported from mid-December 2022 to mid-April 2023. Note that this list does not include some key cases that we’ve already reported on in our “Labs in Court” section:

Mid-December 2022

December 14, 2022: Minal Patel, the owner of genetic testing lab LabSolutions LLC, was convicted of 10 counts related to his role in a $463 million Medicare fraud scheme. Conspiring with call centers, telemedicine companies, and patient brokers, Patel obtained Medicare patients’ consent for genetic testing. He then paid kickbacks to patient brokers for doctor’s orders for genetic testing, billing Medicare $463 million for these unnecessary tests. Of the more than $187 million Medicare reimbursed for the tests, Patel himself received a roughly $21 million cut. His sentence had not yet been announced as of press time.⁴

December 15, 2022: In another case involving genetic testing, Florida-based company Ocenture LLC and its subsidiary, health and wellness company Carelumina LLC, agreed to pay $3 million to settle false claims and kickback-related allegations. Ocenture and Carelumina are accused of obtaining Medicare recipients’ genetic samples—both directly and via other marketers—and then paying doctors “to falsely attest that the genetic testing was medically necessary.” Once the genetic testing had been performed and billed to Medicare by the labs, Ocenture and Carelumina received a cut of the reimbursement.⁵

December 15, 2022: A doctor and medical group agreed to pay $4,267,950.21 to settle False Claims Act allegations. Jasdeep Sidana, MD, and Docs Medical group, Inc., Docs Medical Inc., Docs Urgent Care LLP, Lung Docs of CT, P.C., Epic Family physicians, LLP, and Continuum Medical Group, LLC (together known as “Docs”) were accused of billing Medicare and state Medicaid programs for both unsupervised and unnecessary allergy services. In addition, they were accused of improper billing related to office visits involving COVID-19 tests and for billing for services as if they were performed by Sidana, when they were not.⁶

December 19, 2022: Dominion Diagnostics, a Rhode Island-based clinical lab, paid $1.5 million to settle allegations that it paid kickbacks to a Massachusetts-based clinical laboratory in exchange for urine drug test (UDT) referrals. Dominion then allegedly billed the Massachusetts state healthcare program for these medically unnecessary tests. Dominion and the Massachusetts lab were also accused of further improper billing.⁷

January 2023

January 10, 2023: Donald Booker, the owner of both United Diagnostics Laboratories (urine toxicology testing laboratory) and United Youth Care Services, was convicted of several charges related to his role in an $11 million Medicaid fraud scheme revolving around unnecessary UDTs, kickbacks, and money laundering.⁸

February 2023

February 7, 2023: Twenty-three people from Michigan were charged in two alleged Medicare fraud schemes worth $61.5 million. In addition to other medically unnecessary services, those involved are accused of paying and receiving bribes and kickbacks for medically unnecessary UDTs, which were then billed to Medicare.⁹

March 2023

March 10, 2023: A Massachusetts-based clinical laboratory and its owner were charged for their roles in an alleged $400,000 Medicaid fraud scheme and larceny related to medically unnecessary UDTs. Lab owner Rita Ausiejus and Solid Diagnostics, Inc. are charged with two counts each of Medicaid false claims, Medicaid reverse false claims, and larceny over $1,200.¹⁰

March 13, 2023: The operator and co-owner of a Chicago-based lab, identified only as “Laboratory A,” was charged with one count of theft of government funds and 10 counts of wire fraud relating to an alleged COVID-19 testing scheme. Zishan Alvi is accused of “delivering inaccurate and unreliable test results” to the public as well as billing over $83 million to a federal healthcare program for these improperly performed tests as well as for tests that had already been paid for by clients, or not performed at all.¹¹

March 20, 2023: A doctor, his pain management practice, and the practice’s manager agreed to pay $5 million to settle FCA allegations. Mark A. Ellis, MD, Ellis Pain Center (EPC), and Patsy Allen were accused of billing Medicare for medically unnecessary diagnostic tests and UDTs, as well as for UDTs that were never performed.¹²

March 23, 2023: Doctors William Lawrence Siefert and Timothy Ehn were each convicted of healthcare fraud for their role in a scheme involving Ehn’s pain clinic, Northern Kentucky Center for Pain Relief. Siefert was employed as a medical doctor at the clinic. The two billed Medicare for millions of dollars’ worth of medically unnecessary urinalysis testing, including testing done on supposedly “faulty machinery.” Ehn, a chiropractor, was also convicted of conspiracy to commit healthcare fraud. They are scheduled to be sentenced in September.¹³

March 28, 2023: A Utah man who, along with his co-conspirators, owned, operated, and had a financial interest in a clinical lab, telemedicine company, and marketing call center, pled guilty to his role in an $89 million genetic testing fraud scheme involving these companies. Jordan Bunnell and his accomplices paid bribes and kickbacks for cancer genetic screening (CGx) test referrals and orders, which were then billed to federal healthcare programs “without regard for medical necessity.”¹⁴

April 2023

April 5, 2023: Three former executives from medical device company Magellan Diagnostics, Inc., were each charged with introduction of misbranded medical devices into interstate commerce, conspiracy to defraud an agency of the United States, conspiracy to commit wire fraud, and wire fraud relating to hiding a serious defect in the company’s lead testing devices. This line of devices—which included LeadCare Ultra, LeadCare II, and LeadCare Plus—was used to test blood samples taken via either fingerstick or venous blood draw to detect lead poisoning or lead levels.

The company’s former CEO, Amy Winslow; COO, Hossein Maleknia; and director of quality assurance and regulatory affairs, Reba Daoust, are alleged to have “repeatedly misled” both their customers and the FDA about the flaw in these devices when testing venous blood samples, which allegedly caused tens of thousands of adults and children “to receive inaccurately low lead test results.”¹⁵

April 20, 2023: In a major crackdown on a total $490 million worth of COVID-19 fraud, a-yet-to-be-named lab owner faces charges for billing a private insurance company, Medicare, and the Health Resources and Services Administration more than $358 million in COVID-19 add-on tests. The lab, which performed COVID-19 screening for schools, nursing homes, and other facilities, allegedly added medically unnecessary respiratory pathogen panel tests to these COVID-19 tests in order to increase the reimbursements it received.

The crackdown also included the first charges leveled against those who supply COVID-19 OTC tests. With Medicare coverage for OTC kits starting in April of last year, some OTC suppliers are alleged to have exploited the program by repeatedly ordering dozens of tests for people who did not need or request them. In some cases, tests were ordered for dead people.²

Takeaways

Based on the dominance of UDT-related cases over the past several months, it’s clear that cracking down on fraud involving toxicology labs remains a top priority for enforcement agencies. And, while not as plentiful as cases involving UDTs over this period, genetic testing-related fraud also continues to be a target. However, the relative lack of COVID-19-related announcements up to April 20 doesn’t mean this area isn’t still important to enforcement agencies, but more likely reflects the fact that many such cases are still in “their investigative infancy,” according to Danielle Tangorre, a partner at law firm Robinson+Cole, in an email interview. She also notes that “the DOJ has tended to coordinate law enforcement actions related to COVID-19 healthcare fraud across multiple districts, often leading to delayed announcements,” citing the department’s April 20 announcement as a recent example.