Doctors Beware: Genetic Testing Scams Rip off Government Payers for Hundreds of Millions - Part 2 of 2

Thursday, May 9, 2019
By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Physicians, nurse practitioners and other health care professionals need to be aware of the genetic testing scams that are being used.  These scams are used to rip off government funded programs by millions of dollars. This two part blog series aims to warn doctors and other health professionals of the dangers they may face from inadvertently becoming involved in one of these schemes to defraud insurers and government payers.

Click here to read part one of this blog series.

The Genetic Testing Scams (Continued).

There have been several genetic testing companies caught improperly billing government programs for unnecessary tests. In one case, an FBI investigation revealed that a Texas hospital CEO submitted claims on behalf of the hospital for allergy and genetic testing that the hospital did not have equipment to perform onsite.

This was done through a process called "pass-through billing."  Using this type of billing process, a physician, hospital or health facility would bill for a service that someone else or some other facility performs. However, most government payers and many insurance companies prohibit or severely limit this process from being used.

In this case, the hospital would send the samples out for the testing to be performed elsewhere.  Then the hospital would bill a greatly marked up fee as though it had performed the services.

This scam is a little different from the ones in the first blog, which you can read here if you haven’t already.

The claims were for patients who actually had received simple spa treatments throughout Texas, most of which were not even performed at the hospital. The question also arises as to whether there was any medical necessity for these tests at all or if it was just a straight out false billing scheme.  The CEO pleaded guilty and admitted to using the hospital’s in-network contracts with the insurance companies to defraud them for laboratory services from September 2017 to June 2018. $55 million worth of fraudulent claims were submitted.

Often elderly, retired and semi-retired physicians are suckered into working for companies providing expensive genetic testing to patients that is billed to their insurance or to the government.  In many cases the physician will never even see the patient, but will order expensive genetic testing through contacts over the Internet or by telephone.  They will receive a small fee, often less than one percent of what the company is billing the payers.  They will often be swept up in the resulting government investigations into insurance fraud and Medicare fraud.

On the Other Hand.

Not all genetic testing is bad and not all genetic testing is for the purpose of scheming to stealing from the government. Genetic testing can help doctors prescribe the medications and the dosages targeted to an individual’s unique medical condition. Unique treatments and cures can be designed.

For example, on March 12, 2019, the Department of Veterans Affairs (VA) announced a proposed partnership with a private health company to provide genetic testing for veterans. The partnership with Sanford Health would provide genetic testing to help doctors furnish this type of highly effective health care to veterans. The program is being initially funded by a $25 million donation from South Dakota philanthropist T. Denny Sanford and a matching amount from Sanford Health.

The initiative will launch in Durham, North Carolina, this year and will first focus on cancer survivors. Organizers plan to roll it out to 125 VA sites by 2022 and provide testing to 250,000 veterans.

The Bottom Line is Be Careful.

Physicians and other health care providers should always be aware of schemes like this and how they can affect your career and your life. Don’t allow your name, provider number and NPI to be used for ordering medically unnecessary tests, procedures or treatments. If you do, you may very well find yourself caught up in a similar FCA or other government investigation. I can tell you from experience that it’s never worth it. Click here to read one of my prior blogs to learn more about the seriousness of health care fraud.

Contact Health Law Attorneys Experienced with Health Care Fraud and Qui Tam or Whistleblower Cases.

The Health Law Firm’s attorneys routinely represent physicians, dentists, orthodontists, medical groups, clinics, pharmacies, assisted living facilities (AFLs), home health care agencies, nursing homes, group homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions.

Attorneys with The Health Law Firm also represent health care professionals and others who may desire to file a qui tam, False Claims Act or whistleblower suit. We work with physicians, nurses and other professionals to investigate, document and file such cases. We have developed relationships with recognized experts in health care accounting, health care financing, utilization review, medical review, filling, coding and other services that assist us in such matters. We have represented number of doctors and other licensed health professionals as relators in bringing qui tam or whistleblower cases. Our attorneys are also available to defend physicians, medical groups and health care providers in qui tam or whistleblower cases.

To contact The Health Law Firm, please call (407) 331-6620 or visit our website at


Maddox, Will. “North Texas Hospital CEO Pleads Guilty to Millions in Fraud.” Healthcare Magazine. (March 14, 2019). Web.

Slack, Donovan. “VA patients will get genetic testing funded by Sanford Health, philanthropic donation.” USA Today. (March 12, 2019). Web.

About the Author: George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida area. The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone: (407) 331-6620.

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