Justice Department Charges 35 People With Defrauding Medicare Of More Than $2 Billion

The Justice Department has charged 35 individuals with defrauding Medicare of more than $2 billion. The scheme allegedly involved bribes and kickbacks for genetic tests to predict cancer.

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The Justice Department is cracking down on fraudulent genetic cancer testing. It's charged 35 people who are associated with dozens of telemedicine companies and cancer genetic testing labs. NPR's Patti Neighmond reports.

PATTI NEIGHMOND, BYLINE: The federal investigation called Operation Double Helix targeted alleged schemes involving the payment of illegal kickbacks and bribes, which cost the Medicare program more than $2 billion in unnecessary charges. Joe Beemsterboer with the Department of Justice.

JOE BEEMSTERBOER: The elderly or disabled are being preyed upon. Elderly are being asked at a call center, would you want to know if you have cancer? Then that system can move very fast when you can reach out to hundreds and hundreds and thousands of patients very quickly with modern technology.

NEIGHMOND: Shimon Richmond with the Department of Health and Human Services describes how it worked - telemarketing companies told Medicare beneficiaries online or called them on the phone or even sent people to approach them face-to-face.

SHIMON RICHMOND: To health fairs, to senior centers, to low-income housing, to religious institutions like churches and synagogues.

NEIGHMOND: Where they offered seniors genetic testing for cancer risk or how well certain drugs would work for them at no cost. All they had to do was provide their Medicare information, a copy of their driver's license and a cheek swab to obtain their DNA. And the sales pitch, says Richmond, included lots of aggressive scare tactics.

RICHMOND: Essentially, telling patients that if you don't have this test, you could suffer from a variety of conditions. Or you could die, you know, and by the time you found out that you have something that needs to be treated, it's too late.

NEIGHMOND: Once recruiters got the information they wanted, they tried to get the patient's actual doctor or health care provider to write a prescription for the test. If that didn't work, they asked a doctor who agreed to write prescriptions for patients they didn't know.

RICHMOND: And these doctors in many cases have zero contact with the patient, have no knowledge of their health care situation or needs.

NEIGHMOND: But there was money to be made from Medicare reimbursement for the genetic test, typically lots of money, split between the patient recruiter, the doctor writing the prescription, the lab that did the tests and the telemarketing company that organized the alleged scheme.

RICHMOND: Anywhere from $10,000 to $18,000 and even sometimes over more than $20,000 thousand dollars being billed to Medicare.

NEIGHMOND: Adding up to a total, as of now, of $2.1 billion in taxpayer losses in what Beemsterboer describes as one of the largest and complex health care fraud schemes ever.

BEEMSTERBOER: From those collecting patient information, to those selling it, to those through doctors corruptly prescribing these tests, all the way through the labs then corruptly billing the Medicare program.

NEIGHMOND: HHS official Richmond says the labs often didn't even send results to patients, and when they did, there was no counselling or help interpreting the findings.

RICHMOND: So patients left with a report that's meaningless to them and is certainly not providing them any benefit in terms of their health care.

NEIGHMOND: And Richmond says the testing could actually backfire. If in the future, for example, the patient's doctor determines the patient needs the genetic test, Medicare likely won't pay, citing an earlier payment. The tests are expensive, which would probably put them out of reach for many patients to pay out of pocket. If convicted, defendants could face decades in prison.

Patti Neighmond, NPR News.

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