Genetic Testing Fraud: How the Sample, the Signature and the Claim Are Bought

Genetic testing fraud turns unnecessary tests, bought orders and false billing into claims against taxpayer-funded healthcare programs. A marketer brings in the patient and the sample, a remote clinician supplies the signature, and a laboratory bills Medicare. Money then goes back to the people who supplied the business. If you work in laboratory sales, billing, specimen processing or a referring practice, you may see where the story changes: the seller chose the test before anyone made a medical decision.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Tell us what you know about the order, the test and the money behind it.

The Sample Is Acquired Before the Claim Is Made

The recruiting scheme starts by obtaining a beneficiary’s insurance information and a specimen. The HHS Office of Inspector General’s genetic testing alert describes offers of free screenings or cheek swabs through telemarketing, public-event booths, health fairs and door-to-door visits. A kit may arrive in the mail even though no physician ordered the test.

The Healthcare Fraud Prevention Partnership’s July 2020 white paper follows that recruitment into the laboratory. Marketers check insurance eligibility, arrange a cheek-swab kit, obtain a telemedicine order and send the sample and order to a lab. In the schemes it describes, the lab bills insurance and pays marketers and doctors for obtaining samples and signing orders.

The pitch can begin at a senior center, a church event or on social media. The white paper describes gift cards and free food used to recruit participants. The beneficiary hears an offer about their health. Behind the offer, somebody is arranging an insurance claim.

That makes the sales side part of the evidence. What the caller promised, who selected the test, where the insurance information went and how the recruiter earned a payment belong alongside the laboratory result. They explain how this particular patient reached this particular lab.

The Signature Can Be Bought After the Test Is Chosen

A paid order supplies the appearance of a clinical decision when the seller has already selected the test. The ordering clinician’s relationship with the patient, the assessment behind the order and the instructions sent with it are central to the scheme.

Following the criminal trial conviction of LabSolutions’ owner, the Justice Department described patient brokers, telemedicine companies and call centers working together. The owner paid brokers to obtain signed orders. He knew that remote doctors signed prescriptions without treating the beneficiaries, often without speaking to them, and without evaluating medical necessity.

The same criminal account describes the cover for those payments: sham advertising contracts. The contracts called the brokers’ work legitimate advertising. The owner knew that brokers were deceptively marketing tests and paying telemedicine companies for prescriptions. The contract described an advertising service. The payment bought access to a signed order.

Another route reaches back into the patient’s own practice. In the Justice Department’s account of the criminal trial involving Axis Professional Labs and Kingdom Health Laboratory, marketers used doctor chase. Nonmedical callers purportedly qualified beneficiaries for testing, then other companies pressured their primary care physicians to approve the orders. The clinical question arrived at the practice with the sales decision already made.

For an insider, that sequence matters. A requisition with a doctor’s name shows the finished form. The communications that preceded it can show who actually chose the test and how the signature was obtained.

The Claim Must Match the Patient, the Order and the Test

The claim connects a patient-specific medical decision to a service the laboratory actually performed.

The white paper describes the clinical sequence as a provider recommending and ordering a test, a laboratory processing the specimen, and the provider receiving and discussing the result. It says the medical record should explain why the patient needs that particular test. For a lab insider, the comparison is concrete: what did the clinician request, what reached the bench, and what went onto the claim?

The white paper distinguishes detecting a genetic variation from showing that the result can improve a patient’s care.

That distinction belongs beside the order. The laboratory may be selling information about inherited risk, a response to a drug or a tumor’s likely progression. The patient’s medical record should explain which decision the information is meant to inform. We examine how the sales promise, clinical purpose and billed service fit together.

The Diagnosis Has to Come From the Patient

The patient history supplies the reason for testing. A cancer history entered to make a claim payable reverses that relationship.

A whistleblower complaint involving LabSolutions and CLIO alleged that medical assistants learned to put false qualifying criteria on order forms. According to the complaint, assistants were told to list a mood disorder for patients taking several medications even when the patients did not meet the appropriate medical criteria. It also alleged that assistants performed cancer and pharmacogenetic testing on the same day but mislabeled testing dates to obtain reimbursement.

We connect the original patient history and staff instructions to the form sent to the lab.

The Performing Lab and the Billing Lab

A specimen can pass through more than one laboratory before an insurer receives a claim. The white paper describes billing laboratories contracting with other labs to perform genetic tests, as well as schemes that billed without processing a sample at all.

The laboratory that received the specimen, the laboratory that ran the assay and the company named on the claim therefore matter separately. We connect the specimen’s path and the result to the billed service. The white paper identifies repeated medical-necessity letters, matching requisitions across laboratories and tests dated before the signed order as reasons for closer examination.

There is also the question of what happened to the result. The federal genetic-testing charges described patients who never received results and results that were useless to their treating doctors. The laboratory’s delivery record and the treating practice’s account can show whether the test ever reached the care it supposedly served.

One Panel Can Become Several Charges

The white paper describes genetic-testing unbundling as billing individual tests separately when an appropriate panel code should describe the service. It also identifies blanket ordering, where tests are ordered without regard to individual circumstances.

Those practices leave different trails. In one, the billed description splits up the work performed. In the other, the order sends a patient through tests without an individual clinical reason. The requisition, panel contents, test report and claim let us examine both the selection and the billing.

Genetic Testing Cases Turn on Different Clinical Questions

Hereditary cancer testing, drug-response testing, prenatal screening and tumor testing serve different decisions. The reason a test was ordered and the service a payer agreed to cover change with the product.

Cancer Risk and the Medication Decision

Cancer genetic testing can assess inherited cancer risk. Pharmacogenomic testing concerns how a person’s genetic makeup affects their response to medication, including drug choice or dosage. The white paper ties pharmacogenomic testing to a particular person’s circumstances and the drug being prescribed.

That distinction gives the insider a specific question to bring us: which medication decision was the pharmacogenomic test intended to inform? For cancer-risk testing, the corresponding question concerns the patient’s personal or family history and how the result would guide care. The order and the treating chart should carry that clinical purpose.

The civil complaint involving LabSolutions and CLIO also alleged that referral companies placed assistants in practices, supplied discounted software and received a fixed payment for each referral. According to the whistleblower, assistants performed ordinary office work and errands as well as obtaining testing referrals. The alleged benefit to the practice extended beyond a test kit. Staffing arrangements, software charges and referral payments belonged to the same commercial relationship.

Prenatal Testing and the Code That Obtained Payment

Progenity admitted that it billed Medicaid and the Department of Veterans Affairs using a code for a different testing method. In the July 2020 civil settlement announcement, the company acknowledged using a code for fluorescence in situ hybridization even though its prenatal tests used cell-free DNA sequencing. That misdescription obtained payments for tests that were not reimbursable, or higher payments than the company was entitled to receive.

Progenity also admitted paying physicians above-market fees for blood draws, providing meals and happy hours, and routinely reducing or waiving patient cost sharing without the required individual assessment of financial need or collection efforts. The company offered the waivers as part of its sales efforts. A whistleblower brought the kickback case, and the government joined it.

Progenity admitted frequently paying physicians $20 or more for each blood draw, above the fair market value of the collection service. The government’s complaint alleged that total draw fees rose with the volume of specimens collected. A sales representative could know the fee offered to a practice, while finance staff could see how payments followed referrals. We connect the sales offer to the company’s own accounts.

Natera’s 2018 Panorama settlement concerned allegations about noninvasive prenatal testing and optional microdeletion screening. The government alleged improper coding and billing for services outside the relevant programs’ coverage during the periods at issue. The payers included TRICARE, the Federal Employees Health Benefits Program and Medicaid. Whistleblowers brought the case.

The industry’s payment rules separate the price assigned to a code from coverage for the service. A test can have a national fee while coverage turns on a national or local policy and the patient’s circumstances. For prenatal-testing staff, the relevant comparison follows the actual assay, the code used and the payer’s coverage for that service at that time. The Natera allegations and Progenity admissions show why the payer belongs in the story from the beginning.

GenomeDx and the Blank Medical-Necessity Form

GenomeDx agreed to a civil settlement of $1,990,380 over allegations that it billed Medicare for postoperative Decipher prostate-cancer tests without the patient risk factors needed to justify them. The government identified tumor stage, surgical-margin findings and changes in prostate-specific antigen levels among the criteria at issue. Two former employees brought the whistleblower case.

Their complaint also alleged that GenomeDx billed its postoperative and biopsy tests under the same unlisted molecular pathology code, 81479, leaving insurers unable to distinguish the tests from the code. It alleged that the company supported biopsy claims with documentation describing the postoperative test. The code concealed the difference. The accompanying paperwork reinforced it.

The complaint described how a patient-specific certification allegedly became a reusable form. They alleged that physicians pre-signed blank certificates, and staff later added the patient’s name, birth date and a date for the signature. The complaint quoted a director’s email about one such certificate:

The alleged shortcut put the signature in place before the patient details. The email matters because it describes the instruction inside the business, beyond the completed form an insurer would see.

What Is the Genetic Testing Scandal?

The Operation Double Helix genetic testing charges alleged that laboratories paid for referrals and doctors signed unnecessary cancer-test orders with little or no patient contact. The September 2019 announcement described criminal charges against 35 defendants associated with telemedicine companies and genetic-testing laboratories. The charged conduct involved more than $2.1 billion in allegedly fraudulent Medicare bills.

The announcement connected the laboratories, recruiters and medical professionals. It alleged that recruiters brought beneficiaries into testing and paid doctors to prescribe it without seeing them, sometimes after only a short call. LabSolutions’ owner’s later criminal trial conviction supplied the more detailed account of bought orders and sham advertising contracts described above.

The smaller payments show what the participants were buying. One recruitment arrangement in the announcement allegedly offered patients $75 gift cards to obtain DNA samples and Medicare information without a treating professional’s involvement. In its account of a separate physician assistant’s criminal conviction, the Justice Department described electronic signatures on prepopulated genetic-testing orders at $12, later $15, per purported consultation.

What Medicare Was Billed and What It Paid

LabSolutions submitted more than $463 million in claims to Medicare from July 2016 through August 2019, and Medicare paid over $187 million, according to the Justice Department’s account of the owner’s criminal trial conviction. The owner personally received over $21 million from Medicare in connection with the fraud during that period.

The scale of the wider market helps explain the commercial interest. HHS-OIG’s report on 2024 laboratory spending put genetic tests at 5 percent of the tests Medicare Part B paid for and 43 percent of its laboratory spending, or $3.6 billion. That category includes human and pathogen tests.

For an insider, the useful numbers are closer to the transaction: the amount billed for the test, the payment the insurer made and the compensation sent to the referral source. The contracts and payment calculations can show whether the business rewarded advertising work, a delivered specimen, a signed order or a paid claim. That is how we connect a recruitment operation to government money.

When You Know Who Bought the Order

If you know how a genetic-testing order was obtained, why a billing code changed or how referral payments were calculated, talk to our whistleblower experts about the business behind the test. We work with you to connect those decisions to the claims and build your strongest genetic testing whistleblower case. We find health care laboratory fraud whistleblower lawyers who know genetic-testing billing and referral schemes, and stay beside you through the whole journey.