The owner and chief executive officer (CEO) of a Tennessee based laboratory was charged on July 2, 2021, with aiding and abetting and violation of the antikickback statute for his role in orchestrating a fraudulent Medicare billing scheme relating to genetic testing in cancer patients.
Beginning in 2016, the owner of the laboratory engaged in a scheme to pay illegal healthcare kickbacks in exchange for the solicitation of genetic tests from Medicare beneficiaries. The CEO contracted with marketing companies to target and recruit elderly patients who were federal healthcare program beneficiaries in order to obtain their genetic material for conducting genetic tests.
Marketers who were not healthcare professionals obtained swabs from the mouths of the patients at nursing homes, senior health fairs, and elsewhere. The tests were then approved by telemedicine doctors who did not engage in the treatment of the patients, and often did not even speak with the patients for whom they ordered tests. Often, the patients or their treating physicians never received the results of the tests.
The owner of the laboratory paid illegal kickbacks and bribes in exchange for the doctors’ orders and tests, without regard to medical necessity. During the period of late 2017 to present, the owner of the laboratory billed Medicare approximately $86 million for genetic testing and was paid almost $14 million for those claims.
This case is being investigated by the U.S. Department of Health and Human Services Office of Inspector General and the FBI. If the owner of the laboratory is convicted, he faces up to 10 years in prison.
Issue:
All laboratory tests performed for residents must be medically necessary in order to bill Medicare, Medicaid, or a private insurance company. When determining if a test or procedure is medically necessary, the results of the test should be needed to diagnose or treat an illness, injury, condition, or disease, or its symptoms. Claims for tests or procedures that are unnecessary to diagnose or treat an illness, injury, condition, disease, or its symptoms may be seen as fraudulent billing. Additional information is available in the Med-Net Corporate Compliance and Ethics Manual, Chapter 2 Financial Integrity, FI 2.1 Billing Management.
Discussion Points:
- Review your policies and procedures on laboratory testing services, including billing practices for laboratory testing. Update as needed.
- Train staff to ensure that ordered testing is medically necessary, and that if a laboratory test is considered medically unnecessary, it should not be submitted for billing. Include your medical director in this effort so he or she can intervene if a provider is not appropriately determining medical necessity for residents. Document that these trainings occurred and file each document in the employee’s individual education files.
- Periodically audit to ensure that laboratory tests meet the criteria for medical necessary. Survey professional staff on their knowledge of what can be considered medical necessary.
