Owner of genetic testing labs found guilty in $463M fraud case

In a development that is now being labeled as one of the biggest healthcare frauds ever, a federal jury convicted the owner of genetic testing labs for conning Medicare for over four hundred million dollars.

The Department of Justice (DOJ) stated that telemarketers were involved in the scheme and supposedly lied to Medicare recipients by providing a guarantee that they have coverage for expensive genetic cancer tests. The tests were allegedly approved by telemedicine physicians without having treated the patients. These physicians had not even talked to them in a handful of cases. The DOJ suspects that the scheme involves dozens of parties in which dubious claims of $463M were made to Medicare.

The convicted owner of LabSolutions LLC was Minal Patel from Atlanta. His gain from the fraud was $27M from the total of $187M that was collected from Medicare between July 2016 and August 2019, which is 14.4%.

Among others who allegedly gained from the scheme were call centers, telemedicine companies, and patient brokers. DOJ said that these entities gained mostly from the bribe payments made by Patel after the Medicare recipients decided to go along with the tests. The patient brokers allegedly got the doctor’s signed orders that had the test recommendations from telemedicine companies. These patient brokers had signed contracts with Patel that falsely stated that these brokers were providing genuine advertising services for the laboratory.

Patel was convicted in Florida by a federal grand jury. The conviction had one count of plotting to defraud the U.S. and of payment and receipt of kickbacks, one of conspiring to commit healthcare fraud, three of healthcare fraud, and one of conspiring to commit money laundering. March 7 is the scheduled hearing date. The possible sentence that Patel could face is over 140 years of imprisonment.

Patel argued that the genetic testing recommended by him should be paid for and given by Medicare as some of the aforementioned tests are suggested by the USPSTF (U.S. Preventive Services Task Force) under some conditions, but the court disagreed with him. The USPSTF includes experts who evaluate evidence for clinical preventive services’ effectiveness.

Patel’s motion to dismiss the case was rejected by the court saying even if it “were to accept Patel’s position that Medicare is required to cover USPSTF-recommended screening tests, the question of whether the CGx tests billed by Patel fell within this USPSTF recommendation—or were otherwise billed in a manner that Medicare covers—is a factual issue that cannot be resolved on a motion to dismiss.”

The court also said that the USPSTF recommendation does not sanction the payment or receipt of kickbacks or the ordering of tests without any interaction with the recipients.

The conviction was the result of an investigation by Operation Double Helix, a federal law enforcement action that is a part of the Health Care Fraud Strike Force. Operation Double Helix directs its efforts on fraudulent genetic testing cases, and in this case, it led to numerous charges against the officials at telemedicine companies and the laboratory.