OIG Report: Genetic Tests Pose Risk for Fraud and Abuse

A blue door with two small holes in it.

The use of genetic testing to determine the risk of developing certain diseases has taken off in recent years. And while they can help healthcare providers and their patients better understand the potential for future health problems and make informed decisions about their healthcare, their use also opens the door to fraud and abuse.

A recent Data Brief released by the U.S. Department of Health and Human Services Office of Inspector General found that between 2016 and 2019, Medicare payments for genetic tests quadrupled from $351 million to $1.41 billion, an increase of 302 percent.

The agency identified approximately $3 billion in Medicare payments for 5.1 million paid genetic tests. Medicare beneficiaries received an average of 2.16 genetic tests over the four-year period. Of the 2.4 million who received at least one genetic test during that period, more than 67,000 of them received 10 or more different genetic tests and more than 3,000 received 20 or more different tests, according to the report.

“The number of laboratories that received more than $1 million for performing genetic tests, and the number of ordering providers for genetic tests all increased during our audit period. Although there are legitimate reasons for these increases, the increases indicate areas of possible concern, such as excessive genetic testing and fraud,†the report notes.

In addition to the increase in the number of genetic tests performed during the four-year period, the number of providers ordering the tests more than doubled from 73,000 to 153,000. And, the amount paid for genetic tests per beneficiary also has significantly increased (up 75 percent) from $889 in 2016 to $1,559 in 2019.

In 2019, OIG issued a Fraud Alert in which the watchdog agency indicated it was cracking down on genetic testing fraud schemes nationwide. At that time, OIG reported it had charged 35 individuals for their participation in a genetic testing scheme in which recruiters paid doctors kickbacks in exchange for ordering the test.

The most common types of fraud include billing for services not performed, unbundling of claims and blanket ordering of tests (i.e. indiscriminately ordering a number of tests for a beneficiary without considering the beneficiary’s specific needs.)

OIG noted that the COVID-19 pandemic has also created additional opportunities for fraudulent laboratory billing as in some cases providers are ordering “add-on tests,†including genetic tests in conjunction with the COVID tests.

As we wrote about last month, OIG in its Semiannual Report to Congress, noted that in May the agency along with law enforcement partners, targeted efforts against schemes designed to exploit the COVID-19 pandemic through genetic testing scams, which resulted in $143 million in false billings.

As the use of genetic testing continues to increase, so too does the opportunity for fraud and abuse. OIG has made it clear that it will continue to monitor this area of concern and providers would be well advised to make sure their testing practices are in compliance.

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.

For more information you can contact us at 305-358-4500 or send us an email to info@vitalehealthlaw.com and let’s discuss how we might be able to assist you.

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