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Gene-Test Fraud Billed $2.1 Billion to U.S. Medicare Program

Sept. 27, 2019, 5:44 PM

In what U.S. law-enforcement officials are calling one of the biggest health-care frauds in history, the Justice Department said that Medicare was fraudulently billed $2.1 billion after seniors were enticed to take unnecessary genetic tests for cancer.

The Justice Department and the Department of Health and Human Services said on Sept. 27 that 35 defendants associated with dozens of telemedicine companies and cancer genetic testing laboratories had been charged with fraud. Those charged included nine doctors.

“These defendants allegedly duped Medicare beneficiaries into signing up for unnecessary genetic tests, costing Medicare billions of dollars,” Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, said in a statement.

Fraud is a major problem for government health programs. Since 2007, a Medicare fraud task force has filed more than 1,600 cases against almost 3,500 defendants who are alleged to have fraudulently billed Medicare more than $13 billion, according to a 2018 report by the Department of Health and Human Services’ Office of Inspector General.

The genetic-testing allegations are a new twist. They capitalize on interest and curiosity in DNA testing to attract seniors, disabled people and others covered by government programs to submit to tests, and then bill the government.

The latest case allegedly involved illegal kickbacks and bribes paid to doctors and medical professionals for referring Medicare beneficiaries for expensive cancer DNA tests. Frequently, the test results were either worthless or not provided at all, authorities said. They were also often sometimes prescribed with little more than a brief phone conversation or with no doctor-patient interaction.

The U.S. Department of Health and Human Services Office of Inspector General had previously warned about fraudsters peddling DNA tests targeting victims through telemarketing, booths at public events and door-to-door visits. In some cases, the agency has said, the perpetrators bill the government more than $13,000 per person.

To contact the reporter on this story:
Kristen V. Brown in San Francisco at kbrown340@bloomberg.net

To contact the editors responsible for this story:
Drew Armstrong at darmstrong17@bloomberg.net
Timothy Annett

© 2019 Bloomberg L.P. All rights reserved. Used with permission.

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