Conviction in $9.5M Genetic Testing Healthcare Fraud Scheme

A Chicago physician licensed to practice in several states recently was convicted by a federal jury in Nashville, Tenn. in a healthcare fraud scheme of conspiracy to violate the federal Anti-Kickback Statute following a two-week trial.

Doctor Acted as a Consulting Provider for Telemedicine Companies

Dr. Benjamin T. Toh was indicted in December 2022 for his role in a more than $9.5 million healthcare fraud conspiracy. According to evidence presented at trial, Toh operated as a consulting provider to purported telemedicine companies.

Toh obtained access to Medicare and Medicaid patients through the purported telemedicine companies, and signed orders for cancer genetic testing (“CGxâ€) in exchange for the payment of kickbacks. In CGx testing, DNA sequencing is used to detect mutations in genes that could indicate a higher risk of developing certain types of cancers in the future.

Genetic Tests Not Medically Necessary

He signed the orders regardless of whether they were medically necessary. Toh was not the patients’ treating physician nor did he conduct actual telemedicine visits or follow up with those patients on the test results.

His co-conspirators included Advanced Tele-Genetic Counseling , (ATGC), a Kentucky-based telemedicine company, whose owner, Elizabeth Turner, pleaded guilty in 2021 to healthcare fraud conspiracy in the Middle District of Tennessee. 

Healthcare Fraud Co-Conspirators

Turner was charged in this healthcare fraud scheme with conspiring with Fadel Alshalabi, the owner of Crestar Labs, LLC, based in Spring Hill, Tenn., Melissa Lynn “Lisa†Chastain, the owner of marketing company Genetix, LLC, located in Belton, S.C., as well as other marketers and physicians, to offer, pay, solicit and receive illegal kickbacks and to defraud the Medicare and Medicaid Programs.

According to the evidence from March 2019 through September 2019, Toh and the others caused the submission of more than $9.5 million in fraudulent claims to Medicare and Medicaid for thousands of cancer genetic tests. ATGC received approximately $234,730 in illegal kickback payments.

Unsuspecting Patients Recruited by Marketers

In exchange for providing signed orders for genetic testing, the defendant was paid kickbacks by co-conspirator telemedicine companies.  These companies were, in turn, paid by co-conspirator marketing companies that targeted Medicare and Medicaid patients through door-to-door marketing, at senior fairs, at nursing homes, and at other locations, and convinced patients to provide their genetic material via a mouth swab kit.

The marketers then provided the swab kits to a lab in Spring Hill, Tenn., for laboratory cancer genetic testing in exchange for illegal kickbacks paid to them by the lab. The lab billed Medicare and Medicaid for the tests. 

Based on the count of conviction, Toh faces up to 5 years in prison and a $250,000 fine. He will be sentenced on January 9, 2024. The jury was unable to reach a verdict on a second conspiracy charge.

Genetic Testing Fraud Lucrative for Scammers

Genetic testing, which is lucrative and prone to abuse, is fertile ground for healthcare fraud. The cost of genetic testing can range from $100 to more than $2,000, depending on the nature and complexity of the test.

As we wrote about in July, inadequate oversight by the Centers for Medicare & Medicaid Services (CMS) of payments for the highest-paid genetic test risked up to $888 million in improper payments, according to a recent audit by the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG).

When is Genetic Testing Covered?

Genetic testing reimbursement requires as a condition that the testing is reasonable and necessary for the diagnosis or treatment of an existing healthcare condition, that is, where signs and symptoms of a condition are already detectable to the patient and/or doctor. Coverage is generally denied in cases where no signs or symptoms are present, but a patient may just want to know their risk of getting a particular disease. The Center for Medicare & Medicaid Services (CMS) considers predictive tests to be screening tests, genetic tests for this purpose are not covered by Medicare.

Healthcare Fraud Convictions Result in Jail Time, Stiff Fines

Healthcare fraud and anti-kickback violations are each punishable by a maximum penalty of 10 years in prison. Conspiracy to pay and receive kickbacks is punishable by a maximum penalty of five years in prison.

The Health Law Offices of Anthony C. Vitale represents healthcare professionals in state and federal court who are charged with fraudulent billing, kickbacks, Medicare and Medicaid fraud and false claims, among others. For more information, contact us at 305-358-4500 or email info@vitalehealthlaw.com