Renton Physician Genetic Testing Kickbacks: A Few Minutes on the Phone, Then an Order

A Renton, Washington, physician’s genetic-test orders generated more than $18.6 million in Medicare payments while he collected $167,996 in kickbacks, according to the Justice Department’s account of his criminal plea. The doctor admitted accepting payments for ordering medically unnecessary genetic testing for people he was not treating. Elderly beneficiaries underwent unnecessary testing, and taxpayers paid for it.

How Telemarketer Calls Became Genetic Test Orders

Telemarketers connected the physician to Medicare beneficiaries for calls lasting a few minutes, his only contact with them. In its September 28, 2022 announcement, the U.S. Attorney’s Office for the Eastern District of Washington described his plea agreement and court proceedings: the doctor ordered genetic tests for beneficiaries with whom he had no physician-patient relationship. The scheme targeted elderly beneficiaries in Washington and other states.

After those brief calls, laboratories billed Medicare for genetic tests, while another company billed for purported telemedicine visits, sometimes for tens of thousands of dollars. A person reviewing only the laboratory bill would see one part of what the government described.

The physician receiving money for the orders was supposed to supply the clinical judgment behind them. In his plea agreement, he admitted he was not treating these patients. The problem reached beyond what the laboratories did with an order once it arrived: the doctor had accepted payment to produce it.

The Missing Treatment Behind the Genetic Order

The Medicare rule on diagnostic tests ties the order to a treating physician or qualified practitioner who uses the result to manage the patient’s medical problem. The Renton physician admitted that this treatment relationship was missing.

The laboratory and the clinician hold different parts of the information. The laboratory performs the service, reports the result and submits the claim, while the ordering practitioner holds the clinical justification. Clinical Laboratory Compliance Issues, published in the Journal of Health Care Compliance in 2018, explains that laboratories frequently perform tests requested by unrelated physicians. Those physicians generally hold the only medical-necessity documentation and may hold the only documents showing that the test was ordered.

What did the physician know about the beneficiary’s medical problem? What care was the test meant to inform? Those questions reach the clinical decision behind the order, before the laboratory performs the test or bills for it.

That split also matters when Medicare reviews a laboratory claim. CMS asks the ordering practitioner for the relevant medical record. If the practitioner does not supply it, the rule directs the reviewer to notify the party billing Medicare and deny the laboratory’s claim. The laboratory’s bill depends on clinical documentation held by somebody else.

Do Doctors Get Kickbacks for Ordering Tests?

Yes. In his plea agreement, the Renton physician admitted that his co-conspirators paid him for ordering medically unnecessary genetic testing and other services for patients he was not treating. He received the payments between December 2020 and September 2021.

For an insider who sees compensation records, what earned the payment is more revealing than the heading on an invoice. We examine what the payment bought, who approved it and how it related to the orders that reached the laboratory. The physician’s admission supplied that connection in this case: the payments rewarded unnecessary orders.

What Evidence Is Needed to Prove Fraud?

For this kind of genetic testing kickback scheme, the useful evidence connects the contact that produced the order, the services billed and the money paid for generating the order. The Renton case puts those activities in separate hands: telemarketers, the physician, laboratories and the company billing for visits.

Someone who knows how the calls worked can explain what the physician actually did during the encounter later billed as a visit. Someone handling the payments knows what earned a payment and who approved it. Those workers see different ends of the same arrangement. Our whistleblower experts work through those connections with you and develop the case with genetic testing fraud whistleblower lawyers who understand the businesses involved.

When Marketing Supplies the Medical Decision

A separate criminal case involving Axis Professional Labs and Kingdom Health Laboratory shows another way marketing reached into the ordering decision. In its account of the laboratory owner’s jury conviction, the Justice Department described marketers using other companies to telephone Medicare beneficiaries and pressure their primary care physicians into approving genetic tests.

Nonmedical personnel had already purported to qualify the beneficiaries for testing during telephone calls. The marketers then pursued the physicians’ approval, a practice the government called doctor chase. In Renton, telemarketers connected beneficiaries to a physician who was not treating them. Here, marketers pursued an order from the beneficiary’s own physician after the sales process had already selected the test.

The conviction account also described sham contracts and invoices that presented the payments as charges for marketing hours. The amounts actually matched an agreed payment per sample. The apparent unit of work was an hour, while the payment followed the sample.

An employee who knows how an invoice was calculated can explain something its label conceals. In Renton, the physician himself admitted what the payments bought.

The Whistleblower May See the Payment First

People working on the marketing side have brought civil laboratory kickback cases. The whistleblowers behind the Admera Health settlement were co-founders of a former third-party marketer for the laboratory. The government alleged that Admera paid commissions to independent-contractor marketers for referrals. The laboratory agreed to pay $5,389,648 over the commission arrangement the co-founders knew from inside.

The people inside the commission arrangement brought the case about it. 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 your work put you between the telephone call, the genetic-test order and the payment, tell our whistleblower experts what you saw. We build your strongest genetic testing whistleblower case with you and bring in genetic testing fraud whistleblower lawyers who understand laboratory billing and paid referrals. We stay beside you as your knowledge of how the business worked becomes the foundation of the case.