LabSolutions: The Genetic-Test Orders Behind the Claims

LabSolutions fraud centered on buying doctors’ orders for unnecessary genetic tests and billing Medicare for them. According to the Justice Department’s report of evidence at the criminal trial, the laboratory’s owner paid patient brokers to obtain signed orders through telemedicine companies, then concealed the payments behind advertising contracts. For someone inside a laboratory, billing office or referral business, the important part is what happened before the claim: a marketing call produced a willing patient, and money produced the medical order.

LabSolutions LLC was enrolled with Medicare and performed sophisticated genetic tests. A federal jury in the Southern District of Florida convicted its owner in December 2022 of health care fraud, paying illegal kickbacks and conspiracy.

The Claims, the Payments and the Owner’s Receipts

LabSolutions submitted more than $463 million in claims to Medicare from July 2016 through August 2019, including claims for thousands of medically unnecessary genetic tests. According to the Justice Department’s later account of the criminal case, Medicare paid over $187 million, and the owner personally received over $21 million from Medicare in connection with the fraud.

Taxpayers paid for tests ordered by doctors who had not evaluated whether the patients needed them.

The Marketing Call Came Before the Medical Decision

The criminal trial evidence described a healthcare referral business built around Medicare beneficiaries, patient brokers, call centers and telemedicine companies. Telemarketing calls falsely told beneficiaries that Medicare covered expensive cancer genetic tests. Once a beneficiary agreed to a test, the owner paid brokers to obtain a doctor’s order authorizing it.

That sequence put the sales decision ahead of the clinical decision. The beneficiary had already agreed before the broker obtained the signed order. The telemedicine company supplied the approval needed to move the test toward laboratory billing.

The Justice Department’s August 2023 account of the criminal case added the decisive detail: the owner knew that telemedicine doctors approved testing without evaluating medical necessity. The doctors were not treating the beneficiaries and often did not even speak with them. What looked like a doctor’s authorization on the laboratory paperwork came from a process that skipped the reason for involving a doctor in the first place.

For an employee who handles requisitions, the signature can be the most familiar part of the file. This case makes the work behind that signature the question. Who spoke with the patient? Who decided which test to order? What medical problem was the test supposed to help manage? In the criminal account, the paid order process had displaced that evaluation.

Advertising Contracts Concealed the Referral Payments

The LabSolutions owner required patient brokers to sign sham contracts describing their work as legitimate advertising. The Justice Department’s criminal-case account says he knew the brokers were deceptively marketing to Medicare beneficiaries and paying kickbacks and bribes to telemedicine companies for genetic-testing prescriptions.

The contract described an advertising service. The arrangement bought access to beneficiaries and the orders needed to bill for their tests. The owner paid the patient brokers, and the brokers paid the telemedicine companies. Following those payments explains what the laboratory was purchasing more clearly than the service description on the contract.

A laboratory employee may see an advertising vendor in the payment records while someone handling incoming orders sees that vendor supplying referrals. Together, those views can explain a transaction that either department sees only in part.

Why a Genetic-Test Order Matters to Medicare

In the LabSolutions criminal case, a paid signature took the place of a medical decision. Medicare’s ordering rules tie diagnostic laboratory testing to a treating physician or qualified practitioner who uses the results to manage the patient’s medical problem.

The practitioner keeps the medical-necessity documentation. The laboratory must retain what it receives and documentation showing that its claim accurately reflects that information. The order and the billing record need to tell the same patient-specific story.

Laboratory Medicine described this responsibility in its 1997 article Model Plan Helps Laboratories Fight Fraud. Reporting on the federal inspector general’s model compliance plan, it described uniform requisitions with space for a diagnosis code supporting each ordered test and monitoring of standing orders for continued validity. Those controls address the question the paid referral process bypassed: why did this patient need this test?

A Separate Civil Case About LabSolutions Referrals

Whistleblowers also brought a separate False Claims Act case in South Carolina involving LabSolutions. The government joined part of that civil case. Its whistleblower complaint alleged a referral arrangement involving medical assistants placed in physician practices, altered testing dates and invented qualifying criteria.

The companies supplying the medical assistants allegedly directed them to send testing referrals to LabSolutions and CLIO Laboratories. The complaint described the payment arrangement this way:

The whistleblowers alleged that both laboratories knew how the referrals were being obtained.

Referral Quotas Reached Into the Physician’s Office

The complaint alleged that medical assistants were told to obtain at least 15 testing referrals per assistant each day. They were allegedly directed to handle only referrals involving Medicare, Medicaid and TRICARE and to avoid spending time on private-insurance tests.

According to the complaint, the assistants reviewed patient lists at the start of the day and used questions drafted to generate testing referrals. The alleged volume target was built into the work inside the practice, where patients would ordinarily expect a clinical decision.

The complaint also alleged that the assistants performed routine work for the practices, including entering medical records, taking vital signs and handling errands such as picking up lunch. The referral arrangement allegedly supplied the practice with labor extending well beyond the laboratory tests themselves. That gives someone working in the office another view of the relationship: what the practice received alongside the referrals it generated.

The Dates and Diagnoses Were Allegedly Made to Fit

The whistleblowers alleged that medical assistants performed cancer genomic screening and pharmacogenetic testing on the same day but were instructed to put different dates on the forms sent to the laboratory. The complaint said the purpose was to obtain reimbursement for tests the participants believed Medicare would not reimburse when performed on the same date. It also alleged that physicians signed off on forms bearing the incorrect dates.

The alleged changes reached the clinical justification too:

One example in the complaint concerned patients taking several medications. The whistleblowers alleged that assistants were told to list a mood disorder as a reason for further testing even when the patients did not meet the appropriate medical criteria.

The alleged paperwork changes served different purposes. A changed date disguised when testing occurred. An invented diagnosis supplied a reason to pay for it. An employee who knows how those entries were created can explain something the finished form conceals.

In that civil case, the court entered a $360,000 default judgment against CLIO Laboratories in March 2026 after that company did not defend the case.

What Is the Genetic Testing Scandal?

The Medicare genetic testing scandal included networks that allegedly paid for patient referrals and doctors’ orders, then billed for unnecessary cancer genetic tests. LabSolutions’ criminal case was brought as part of Operation Double Helix, a federal enforcement effort focused on that business model.

The September 2019 charging announcement alleged more than $2.1 billion in Medicare billing across 35 defendants in five federal districts.

The wider charges also described doctors prescribing tests with no patient interaction or only a brief telephone conversation. The government alleged that results often did not reach beneficiaries or were worthless to their actual doctors. That allegation gets to the patient side of the arrangement: a test could generate a Medicare claim without giving the treating doctor useful information for care.

Doctor Chase Used a Different Route to the Order

In the criminal accounts, LabSolutions bought orders through telemedicine doctors who were not treating the patients, while doctor chase pressured the patients’ own physicians to approve testing.

What Evidence Is Needed to Prove Fraud?

For the practices shown here, useful evidence connects the patient’s order and medical justification to the test, the claim and the referral payment. Requisitions, claim records, advertising agreements, payment records and communications about approvals can show different parts of the same transaction.

A biller may see which tests and diagnoses reached Medicare. A medical assistant may know why the date or diagnosis on a form differs from what happened in the office. Someone in the referral business may understand what a contract called advertising and what the payment actually bought.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know How the Orders Arrived

If you saw genetic-test orders bought through a referral business, or dates and diagnoses changed to get claims paid, speak with our whistleblower experts about the orders reaching your laboratory. We build your case around the decisions you can explain, match it with laboratory fraud whistleblower lawyers who know referral schemes, and stay beside you through the pursuit of a recovery.