Lab Owner Gets 27 Years, Must Pay Back $187M in Genetic Testing Healthcare Fraud Scheme

An Atlanta lab owner has been ordered to turn over $187 million in ill-gotten gains he obtained in a healthcare fraud scheme that involved kickbacks and bribes in violation of the Anti-kickback statute and False Claims Act.

The order was recently issued by a Miami federal judge against Minal Patel and follows his sentencing in August to 27 years in prison for his role in a scheme to defraud Medicare by submitting more than $463 million in genetic and other laboratory tests that patients did not need.

The proceeds include more than $30 million in cash, a 2018 Red Ferrari Spider, a 2019 Land Rover Range Rover, and real property.

The Healthcare Fraud Scheme

Patel owned LabSolutions LLC. It was alleged in this healthcare fraud scheme, that he conspired with patient brokers, telemedicine companies, and call centers to target Medicare beneficiaries with calls claiming that Medicare covered expensive cancer genetic tests. The costs of genetic testing can range from under $100 to several thousand dollars depending on the complexity.

After the Medicare beneficiaries agreed to take a test, Patel paid kickbacks and bribes to patient brokers to obtain signed doctors’ orders authorizing the tests from telemedicine companies.

To conceal the healthcare kickbacks and bribes, Patel required patient brokers to sign sham contracts that falsely stated that the brokers were performing legitimate advertising services for LabSolutions. However, the brokers were deceptively marketing to Medicare beneficiaries and paying kickbacks and bribes to telemedicine companies for genetic testing prescriptions. The fraud took place between July 2016 to August 2019.

“This outcome sends a strong message that HHS-OIG will not tolerate those who exploit Medicare patients and who pay kickbacks to providers to prescribe medically unnecessary genetic tests, all for illegitimate financial gain,†said Acting Special Agent in Charge Julie Rivera of the HHS-OIG.

Genetic Tests Must be Medically Necessary

Any test must be ordered by a physician and be medically necessary to be covered by Medicare and other payors. Healthcare providers should be advised that accepting remuneration in return for ordering unnecessary tests is a violation of the Anti-kickback law, which prohibits anyone from soliciting or receiving remuneration of any type in exchange for referring a patient for services where a federal healthcare program pays or for purchasing an item or service for which a federal healthcare program pays.

A violation can result in significant jail time and subject violators to fines and even result in the loss of a healthcare provider’s license.

Operation Double Helix

This case was brought as part of Operation Double Helix, a federal law enforcement action led by the Health Care Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section. It focused on fraudulent genetic cancer testing that resulted in charges against dozens of defendants responsible for more than $2.1 billion in healthcare fraud. The defendants were associated with telemedicine companies and cancer genetic testing laboratories for their alleged participation.

Genetic Testing Fraud Growing Problem

Genetic testing fraud has become more and more prevalent in recent years. In 2019, the Department of Health and Human Services Office of Inspector General announced expanded efforts to target genetic testing fraud schemes nationwide.

Patel’s case should serve as a reminder for those working in these spaces to proactively monitor compliance with healthcare laws, including the Anti-Kickback Statute and False Claims Act.

Genetic Testing Guidance

A White Paper produced in 2020 by the Healthcare Fraud Prevention Partnership (HFPP), a public-private partnership of healthcare payers and allied organizations, aimed to clarify the clinical genetic testing field and provide a review of guidance on the appropriate use of genetic testing services.

It also identified several systematic challenges that HFPP Partners believe make genetic testing vulnerable to potential fraud, waste, and abuse cases, including:

• The need for stronger or updated controls and standards for a rapidly expanding clinical domain
• The complexity and continuing evolution of genetic testing
• The increased marketing of tests and individual demand for genetic testing

Services to Fit Your Needs

The Health Law Offices of Anthony C. Vitale can provide you with compliance oversight services, assuring that your business relationships are compliant with all federal and state fraud, waste and abuse laws. We also represent healthcare professionals in state and federal court who are charged with fraudulent billing, kickbacks, Medicare and Medicaid fraud and false claims, among others.

Give us a call at 305-358-4500, or send an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.