Scranton Physician Genetic Testing Kickbacks: Cash for Genetic-Test Orders in the Physician’s Office

Scranton physician genetic testing kickbacks tied monthly cash payments to Medicare patients’ DNA samples and test orders, according to federal criminal plea accounts. Two primary care doctors and members of their office staffs admitted participating in the arrangements. For someone handling swabs, requisitions or referral payments, the telling detail was the change in testing volume when the cash stopped and started again.

The offices supplied samples and orders to clinical laboratories in New Jersey and Pennsylvania. In a separate arrangement, a health-fair sales representative paid one of the doctors to authorize tests for people he never met. The same physician’s credentials could put both his own patients and strangers from a fair into the laboratory’s stream of tests.

Do Doctors Get Kickbacks for Ordering Tests?

Yes. In these criminal cases, doctors admitted accepting payments in exchange for genetic-test referrals. The Justice Department’s July 2020 charging account described monthly cash kickbacks ranging from $500 to $5,000, usually handed over in the doctors’ offices, sometimes behind locked doors.

The government alleged that both doctors ordered fewer tests when payments failed to arrive and typically increased their orders when payments resumed. The question was what the money bought: access to Medicare patients, collected DNA samples and orders that directed testing to particular laboratories.

The criminal charging account also described recorded conversations. After accepting a cash payment, the physician whose wife helped run his offices counted it and said:

The same account said the doctor and his wife complained that the payments were too small and negotiated a higher fee. They were bargaining over the price of the referral relationship.

The Peckville Employee Was Paid for Test Volume

At the Peckville practice, an employee prepared genetic-test paperwork and received payments calculated from the volume of tests the doctor generated. The Justice Department described that arrangement in its November 2020 announcement of her guilty plea.

According to the criminal plea account, the physician and employee began accepting monthly cash payments in December 2018 in exchange for collecting Medicare patients’ DNA and sending it to laboratories for genetic testing. The physician generally took the cash inside his medical office. The employee’s work connected the samples collected there to the paperwork accompanying them.

The same plea account described the doctor’s response when payments stopped: orders dipped. When payments flowed, he increased the volume. His recorded explanation was short:

Medicare paid approximately $350,374 for tests generated from this practice under the arrangement described in the employee’s plea account. The monthly payments bought a flow of testing that left taxpayers with the bill.

The physician also pleaded guilty to this office scheme and the separate health-fair scheme, as the government’s later health-fair plea announcement confirmed. The employee’s admitted role matters to an insider because the payment formula reached the person preparing the orders, as well as the doctor authorizing them.

A Spouse Negotiated While Employees Collected Swabs

In the other practice, the physician’s wife helped manage his Scranton-area offices and negotiate the payments. Two employees collected DNA swabs in exchange for payments of their own. The November 2023 announcement of the couple’s guilty pleas described this division of work.

The criminal plea account said that the couple began soliciting and receiving monthly cash payments in 2018. The couple accepted cash in one of the offices, sometimes behind locked doors, and negotiated for more when they thought the payments were inadequate.

Medicare was billed over $1.3 million for tests generated from this physician’s practice. The same announcement confirmed that both employees had already pleaded guilty for their roles.

The person who negotiates the laboratory relationship may be different from the person who swabs the patient or prepares the requisition. Here, the criminal account connected those jobs through the payments made to the people doing them.

Cancer Testing Became Another Commission Opportunity

The July 2020 criminal charging account alleged that the Peckville physician proposed adding cancer genetic screening tests after learning about laboratory sales commissions of up to $2,500 per test. He proposed sending the samples to a new laboratory and splitting its commissions.

According to that account, he had not previously ordered cancer genetic tests for his patients. Once he saw the payment opportunity, he described his office as open for that testing. The government also alleged that the other physician and his staff began ordering CGx tests to make more money from kickbacks.

A test-menu change can reveal that connection when read alongside the discussions about compensation: who introduced the test, which laboratory would receive it and who expected to share the money.

The pandemic changed how some payments arrived. The charging account alleged that, as office visits fell, the physician whose wife managed his offices switched from hand-delivered cash to wires and a phone payment app. The Peckville physician instead accepted cash in a fast-food parking lot.

Health-Fair Samples Borrowed a Physician’s Credentials

The health-fair arrangement supplied a physician’s authorization for patients outside the practice. In the November 2021 announcement of a former laboratory sales representative’s guilty plea, the government described how she collected DNA samples from Medicare patients at fairs and sent them to a New Jersey laboratory for cancer screening in exchange for commissions.

She was not a health care provider and needed a doctor’s sign-off to order the tests. She paid the Peckville physician to use his name and medical credentials. He never attended the fairs and never met the patients whose tests he authorized, according to the criminal plea account.

Medicare paid over $340,000 for cancer genetic tests resulting from that arrangement. The sales representative brought the patients and samples. The physician supplied the authority to order.

This is a distinct path from collecting DNA inside a primary care office. A laboratory receiving the order would see a physician attached to it. The plea account explains how that attachment was purchased by someone who had actually met the patient.

What the Physician’s Order Was Worth

The ordering clinician controls information the laboratory needs to support its claim. Under Medicare’s ordering and documentation rules, the treating practitioner orders the test, uses its results in managing the patient’s medical problem and retains the medical-necessity documentation. The laboratory performs the testing, reports the result and submits the claim.

That split gives the physician’s office commercial importance before a specimen reaches the laboratory. In the office arrangements here, employees helped produce the paperwork or collect the swabs. In the health-fair arrangement, a paid physician authorization connected a sample collector to a laboratory that could perform the test.

The importance of the requisition was already clear in Laboratory Medicine‘s 1997 article Model Plan Helps Laboratories Fight Fraud. Describing the Inspector General’s model compliance plan, the article discussed forms with space to document the medical necessity of each ordered test. It also described reviewing test-use data to see which tests laboratories performed for Medicare patients.

Those two views belong together in this case. The requisition tells the laboratory what to perform. The pattern of orders, read with the payment history, can show what drove the office to send them. The criminal account’s repeated rise and fall in testing volume gives an insider something specific to recognize beyond the existence of a signed form.

The Office Records Behind a Whistleblower Case

An insider may know how a sample, a requisition and a referral payment came together. In these arrangements, the useful connections included the office that generated the order, the employee who prepared it, the laboratory receiving the specimen and the compensation tied to the testing volume.

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

You Know Why the Orders Changed

If you saw cash payments change the testing in your office, or saw physician credentials used for patients outside the practice, speak to one of our Whistleblower Experts about why the orders changed. We build the case with you, bring in laboratory fraud whistleblower lawyers who understand referral payments and Medicare billing, and stay beside you through the pursuit of a recovery.