When technology or insurance coverage determinations evolve, so do the opportunities for mischief. That’s what my colleagues and I have been seeing in the genetic testing space.

Genetic testing, whether it’s for ancestral research or assessing disease risk, is an extraordinary tool made possible by advances in science, computing capacity, and the sequencing of the human genome. What was inconceivable 25 years ago can now be accomplished with a saliva sample, some mostly automated laboratory tools, focused computing power, and specialized expertise in the identification of the genetic mutations. The cost of genetic testing for disease assessment can be as high as $10,000.

With that kind of money in play, opportunists see an opening.

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Genetic testing labs are sprouting up all over the country, in part because some health insurers now pay for genetic testing in certain circumstances. The Centers for Medicare and Medicaid Services, for example, now pays for what’s called next-generation sequencing for individuals with advanced cancer or a family history of certain types of cancer if the test is medically necessary and is ordered by a treating physician.

It didn’t take long for creative and devious minds to find ways to have CMS issue large reimbursement checks for fraudulent genetic testing schemes.

Just this week, the Office of Inspector General of the Department of Health and Human Services (OIG) updated a fraud alert warning Americans to watch out for scammers:

Scammers are offering Medicare beneficiaries cheek swabs for genetic testing to obtain their Medicare information for identity theft or fraudulent billing purposes. Fraudsters are targeting beneficiaries through telemarketing calls, booths at public events, health fairs, and door-to-door visits…If a beneficiary agrees to genetic testing or verifies personal or Medicare information, a testing kit is sent even if it is not ordered by a physician or medically necessary.”

What’s going on here is the same pattern of activity that has occurred throughout the health care system: a great majority of law-abiding actors and a few that seek out opportunities to game the system of government reimbursement. If you can get a saliva swab and a Medicare number from an unsuspecting senior and falsify a doctor’s order (or find a shady doctor to write one), there’s an easy four-figure sum to be had. And if you’re willing to repeat that dodge a few hundred or a few thousand times — you get the idea.

All a scammer must do is find a laboratory willing to split the profit from the testing once the DNA samples are in hand. With more and more labs opening, there are plenty of doors upon which to knock.

A typical scheme might go something like this: A scammer offers free ice cream sundaes, gift cards, or even casino chips at a retirement community or “Medicare expo” for anyone who would like to hear about the exciting new technology of genetic testing and what it might reveal about “your family’s risk of cancer” or some other come-on. The scammer describes this sophisticated technology and downplays or ignores the medical necessity criteria and the need for a doctor’s order. He or she persuades some attendees to provide saliva samples and gets identifying information, such as the senior’s name, date of birth, and Medicare number.

The scammer then approaches a testing lab, saying, “I can find you a lot more business and get you a lot more patients — if you share the proceeds with me.” This, of course, violates the federal anti-bribery law known as the Anti-Kickback Act.  But the lure of high-volume profits can be strong enough for some to ignore that roadblock.

An ethical lab would detect that something is amiss with such a request. An alert lab might question how an individual who is not a doctor has gotten so many saliva samples and personal information from so many “patients.” Other labs may simply play the game without asking enough questions or worse, knowing that the tests are not medically necessary, as required by the rules. The promise of easy money can be just too alluring.

Early successes with this opportunistic and illegal behavior are being followed by civil lawsuits and criminal indictments. In February of this year, GenomeDxBiosciences Corp. settled civil claims connected to genetic testing for nearly $2 million. In March, a Cambridge, Mass., company, The Center for Human Genetics, Inc., paid $500,000 to settle the attorney general’s allegations that the company had overbilled MassHealth for genetic tests. And three weeks ago, a New Jersey man was sentenced to 50 months in prison for the kind of scam I described earlier, using inducements and scare tactics to lure seniors into providing saliva samples and then passing along the samples to his employer, a testing lab, without meeting the medical necessity criteria.

More such stories are sure to follow. The fact that OIG has updated its fraud alert indicates that the problem is ongoing and expanding. I expect to see many more such lawsuits and indictments in the coming months — until the scammers and the complicit labs get the message that this opportunity isn’t so easy anymore.

Bob Thomas, a former assistant U.S. attorney, is the co-founder of The Whistleblower Law Collaborative LLC.

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  • I am a licensed Life & Health insurance agent and just started doing this. It is my understanding that the screening is paid for if the patient meets Medicare eligibility, has had Cancer or family members have had cancer, and is found medically necessary by a physician.

  • I was hired to do this at an event in ATL, someone please get in touch with me because myself and several others who did this job were never paid. I have some important info about some folks behind this and a lab who they work for. I want to sue these people but dont know where to start.

  • I got a call about three weeks after a questionable mammogram from RCA Health Solutions. I have a very strong family history of cancer and that is what this genetic screening was for. They did not ask for my information, sent me a ‘swab kit’ in the mail which I completed. It did not require anything other than my name and address on the tubes. The results were to be sent to me and I could share them with my doctor. Here I am still waiting, I think I may not be getting any results. Can they cause any other problems in addition to charging Medicare? Now just add stressed too!

  • I had a call yesterday that said Medicare would not cover cancer diagnoses later if I did not have the test done. Said the test was no cost to me; I told them if they thought I was going to give them my Medicare number they were mistaken; they said would be shared with my doctor, that only my doctor and I would know the results, that they could not even mail it, but had to come in person to take the cheek swab of saliva. I was told someone would call me back within 24-48 hours to set up the appointment. They called back within 5 minutes. I did not answer, because I was searching online for information whether medicare could do such a thing. This morning they have called again, I didn’t answer and put in a search for medicare requiring prescreening cancer cheek swabs and found this. I tried to call back the number, and of course got a recording that the number is not in service; check the number.

    • I’ve been getting these calls with a phone message and finally answered today. The guy said American cancer testing center or something to that effect. I would lose my Medicare benefit if I didn’t participate. I listened for a few minutes and tore in to him. I’m a pancreatic cancer survivor and and don’t call me again you lousy POS

    • Think about it folks. Why are they calling medicare recipients out of the blue repeatedly? And then saying you’ll lose the benefit if you don’t participate. The guy called me by name but the phone number shows that.

  • I agreed to a test because they said they needed my dr’s name and info to get permission, and said they would share info with him as well as me. But I found on the Medicare site that they pay for this only for those with existing and serious cancers, and tho I have a family history, I haven’t been diagnosed at age 75. I worry that this is a scam, but it sounds legitimate. Anyone else have a similar situation?

    • I had a man come to my door and take a swab on my cheek to check on hereditary cancers..i wasn’t offered any payment for it, and my state insurance paid for it, because I had cancer history in my family. My father and uncle both with pancreatic cancer, And my grandmother on my mothers side with breast cancer. I received my results, and wasn’t charged anything that I know of, So I’d say that at least some of these fellas are the real deal.

    • I saw a news report saying these guys “potentially” “could be”a scam. Honestly I don’t think the news even cared to check on it, looks like they just ran the story based off neighborhood suspicion. It would have to be a pretty in depth scam for my Dr. to be in on it.

    • It is not a scam, but there is nothing wrong in asking questions, if you want to protect yourself. It’s called common sense.

    • lol. Anyone that shows up at my front door wanting to swab my cheek is going to be face to face with a .45 cal 1911

  • I got a job doing this, has w2s we get certified and everything, are you saying that my job is illegal? Or is there just scam companies doing the same thing? I really hope I’m not doing anything illegal I love this job.. please lmk ASAP. I’m afraid to go to work now.

    • I just got a job doing the same and I’m hoping this is legit as well. Once you find out please reply back. I’m giving up on another opportunity to work for them.

  • So is there any legit labs ? And how should the process go? I currently do this ,but we are certified with Hippa training

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