Recent OIG Report Finds “Fraud in Genetic Testing is Prevalent,” Pointing to Continued Scrutiny of Genetic Testing Orders

On December 16, 2021, the Department of Health and Human Services, Office of Inspector General (“OIG”) issued a report analyzing nationwide trends in genetic tests for which payments were made under Medicare Part B. The OIG report follows a white paper on genetic testing fraud, which was published by the Center for Medicare & Medicaid Services (“CMS”) Healthcare Fraud Prevention Partnership in July 2020.

According to OIG, between 2016 and 2019, Medicare payments for genetic tests quadrupled, from $351 million to $1.41 billion. This figure represented an increase in the number of tests ordered from 627,000 in 2016 to 2.1 million tests in 2019. In addition, the number of laboratories ordering genetic testing more than doubled, as did the number of providers ordering genetic tests.  

The OIG found that of the 2.4 million Medicare beneficiaries that received at least one genetic test during the audit period, more than 67,000 of those beneficiaries received ten or more genetic tests. Of note, more than 3,000 of those beneficiaries received twenty or more different genetic tests. As such, the OIG’s report concludes that “fraud in genetic testing is prevalent” and describes how recruiters or marketers are targeting beneficiaries through “telemarketing calls, booths at public events, health fairs, and door-to-door visits” to cause genetic testing orders to be issued for those beneficiaries.

Pursuant to Medicare regulations, genetic tests, like most other diagnostic tests, “must be ordered by the physician who is treating the beneficiary, that is, the physician who furnishes a consultation or treats a beneficiary for a specific medical problem and who uses the results in the management of the beneficiary’s specific medical problem.”  

Key Takeaways

Genetic testing is an area of concern, and we expect continued enforcement activity in this area. According to the OIG, to combat Medicare fraud, CMS uses many different techniques, “such as analyzing claims data to identify high-risk providers, performing medical reviews of claims to determine the medical necessity of services, and conducting interviews of beneficiaries about services they received.” Moreover, as recently described by the Chair of Frier Levitt’s White Collar Defense & Government Investigations practice, the Department of Justice has relentlessly pursued laboratory marketing relationships, especially as to genetic testing

How Frier Levitt Can Help

According to the OIG’s report, as of the summer of 2019, the OIG’s Fraud Hotline received 50-60 calls per week, of which nearly a quarter related to genetic testing. Importantly, the OIG’s report did not analyze the years 2020 and 2021. Since that time, and with the introduction of relaxed telemedicine encounter requirements as a result of the COVID-19 public health emergency, there has likely been a continued surge in the number of genetic tests ordered by providers.  

Frier Levitt’s healthcare attorneys have extensive experience helping clients evaluate and develop compliant laboratory marketing arrangements, particularly where these relationships involve a telehealth or telemedicine component. If you are involved in the ordering, performing, or marketing of genetic testing, contact Frier Levitt for an evaluation of the compliance of the arrangement in which you are involved.