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Metric Lab Services and Spectrum Diagnostic Labs Pay $5.7 Million for Genetic Testing Fraud

July 26, 2022

The United States has resolved allegations against two clinical laboratories and their owners involving genetic testing fraud. Metric Lab Services, a clinical lab in Mississippi, Spectrum Diagnostic Labs, a clinical lab in Texas, and two of their owners agreed to pay $5.7 million. The government alleged that they billed Medicare millions of dollars for unnecessary genetic cancer tests. A client of Whistleblower Law Collaborative LLC alerted authorities to the fraudulent scheme.

Labs Pay Kickbacks to Generate Unnecessary Genetic Cancer Tests

The government alleged that Metric Labs and Spectrum Labs falsely billed Medicare for unnecessary genetic cancer tests. Metric Labs and Spectrum Labs paid kickbacks to telemarketers to recruit unsuspecting Medicare beneficiaries to sign up for unnecessary testing.

Additionally, the telemarketers paid doctors to order the tests.  In many instances, the doctor who requested the genetic cancer testing had never spoken to the patient. The doctors ordered the costly testing because they received a kickback payment for every test they requested.

Our client alerted the government to the significant genetic testing fraud activities. As a result, the government launched a multi-state investigation. That investigation was led by the U.S. Attorney’s Office for the District of New Jersey, the U.S. Department of Justice Civil Division, and the Office of Inspector General of the U.S. Department of Health and Human Services.

Investigation Uncovers Brazen Genetic Testing Fraud Scheme

On July 21, 2022, the United States Attorney for the District of New Jersey and the U.S. Department of Justice announced that they had resolved allegations that the two labs paid kickbacks to generate millions of dollars in genetic cancer tests.

In announcing the settlement, Philip R Selinger, the U.S. Attorney for New Jersey, said:

Rather than compete fairly for business, these labs engaged in a brazen kickback scheme to rake in millions of dollars from the Medicare program.

Brian M. Boyton, the Principal Deputy Assistant Attorney General for the Civil Division at the Department of Justice, added: “The department will continue to pursue those who undermine the integrity of federal health care programs and waste taxpayer dollars.”

Whistleblower Law Collaborative LLC attorneys Bob Thomas and Bruce Judge commended the outstanding efforts of the government. Mr. Judge cited the aggressive and skillful work by Assistant U.S. Attorney Andrew A. Caffrey, III and former Assistant U.S. Attorney Bernard J. Cooney, both of the District of New Jersey, along with Department of Justice Trial Attorney J. Jennifer Koh.   Mr. Judge remarked “over the past several years, there has been a flood of genetic testing fraud schemes across the country.  This resolution is an impressive example of the government holding dishonest laboratories and marketers accountable.”

Government Crack Down on Genetic Testing Fraud and TeleMedicine Fraud Continues

On July 20, 2022, the U.S. Department of Health and Human Services issued a Special Fraud Alert.  That alert highlighted the spread of telemedicine fraud in general, and the spread of genetic testing fraud schemes in particular.  Accordingly, the alert warned that genetic testing fraud raised concerns “because of the potential for considerable harm to Federal health care programs and their beneficiaries.”

Simultaneously, the Department of Justice announced a nationwide coordinated law enforcement action to combat telemedicine and clinical laboratory fraud.  The government announced charges against multiple defendants for $1.2 billion in health care fraud.

Whistleblower Law Collaborative

The Whistleblower Law Collaborative LLC, based in Boston, devotes its practice entirely to representing clients nationwide in bringing actions under the federal and state False Claims Acts and other whistleblower programs.  Among the firm’s many successes is a $234 million settlement earlier this year with Mallinckrodt under federal and state False Claims Acts for Medicaid rebate fraud.

 

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