Tampa DNA Testing Marketer: Cash for Swabs, No Results for Patients

The Justice Department described a $2.2 million Medicare DNA testing fraud scheme involving a Tampa-area healthcare marketer who paid Miami clinics for patient swabs. According to its account of the criminal trial evidence, a genetic-testing laboratory paid the owner of DBL Management LLC for each DNA swab he arranged to send its way. He paid clinics to supply those referrals and told their owners to collect DNA from every patient, regardless of medical need. The business rewarded collection, not a decision about somebody’s care.

What Is the Genetic Testing Scandal?

The genetic testing scandal in this case was a marketer paying clinics for Medicare patients’ DNA swabs regardless of medical need. A marketer bought access to beneficiaries through clinic owners and received laboratory payments for the resulting swabs.

The Justice Department’s November 2014 account of the criminal complaint describes what traveled with the samples: patient information. Prosecutors alleged that the marketer and a managing member of Healthcare Marketing Florida LLC paid clinics for both, then supplied them to laboratory companies for submission of Medicare reimbursement claims.

That complaint alleged that the marketer received more than $675,000 from one laboratory company over 14 months for the samples. The later trial evidence made the payment arrangement concrete: the marketer was paid for each swab referred. The instruction to collect from everyone removed the patient’s medical need from that calculation.

A Clinic Visit Became a DNA Referral

The criminal trial evidence showed that the Miami clinics offered food and other inducements to bring Medicare beneficiaries through the door. Once there, patients supplied the DNA that the marketer had arranged to send to a laboratory.

For someone working inside a clinic, the telling instruction was to collect DNA from all visiting patients. A patient’s reason for attending no longer determined whether the clinic collected a sample for testing.

Do Doctors Get Kickbacks for Ordering Tests?

Yes. In this criminal case, clinic co-conspirators paid doctors for DNA-testing prescriptions. The Justice Department’s account of the trial evidence explains what patients got out of the transaction:

The prescription gave the testing a medical document. The patient still went without the result.

Medicare’s diagnostic-testing ordering requirements tie the order to a treating clinician who uses the results to manage the patient’s medical problem. Here, the trial evidence showed clinics buying prescriptions while collecting samples without regard to need. The commercial arrangement supplied both the specimen and the prescription. Medicare was the intended payer for unnecessary tests whose results never reached the patients.

The Laboratory Order Leaves Out the Sales Pitch

The laboratory order can show a test and a diagnosis without showing what the marketer paid to obtain them. In Model Plan Helps Laboratories Fight Fraud, published in Laboratory Medicine in 1997, the discussion of federal laboratory guidance focused on that division: laboratories did not treat patients, but their requisition forms could give physicians space to document why each test was medically necessary.

The article also described written notices to ordering physicians explaining the tests in a laboratory profile and how the laboratory would bill Medicare for them. The clinical reason for testing and the laboratory’s billing were supposed to connect through that exchange.

In the Tampa trial account, the marketer’s collection instructions and the clinics’ purchased prescriptions tell a different story. The commercial side had already decided to collect from everyone. For an insider, knowing how the order was obtained can matter as much as knowing what the order says.

Shell Companies Kept the Scheme Going

The criminal trial evidence showed that the marketer established shell companies, including Healthcare Marketing Florida in Melbourne, Florida, and recruited others to continue the scheme after his arrest on separate health care fraud charges. An employee dealing with that company could be seeing another part of the same referral business.

The earlier criminal-complaint announcement explained that, after the separate arrest, he had been ordered not to work in the healthcare industry. The later trial account described him continuing the referral operation through the shell companies while awaiting trial. The company handling the business changed. The business of buying swabs continued.

In July 2019, a jury found that owner guilty of conspiring to defraud the United States and pay and receive illegal health care kickbacks.

The Referral Payments Also Matter in Civil Cases

In a separate genetic-testing case, UTC Laboratories, also known as RenRX, agreed to pay $41.6 million, part of a $42.6 million settlement that also covered three of its principals, to resolve False Claims Act allegations involving referral kickbacks and medically unnecessary testing. The Justice Department announced that settlement in October 2019.

The government alleged that UTC paid physicians to induce pharmacogenetic-test orders, presenting the payments as compensation for participation in a clinical trial. It also alleged payments that included sales commissions, and Medicare billing for medically unnecessary tests. Whistleblowers brought the cases, and the government joined them.

The alleged arrangement there used research participation and sales compensation. The Tampa marketer’s trial described cash to clinics and payment per swab. An insider who knows what a payment actually bought can explain something the prescription alone does not show.

What an Insider Can See in the Swab Business

Per-swab payment records, clinic collection instructions and the prescriptions obtained for those patients connect the commercial arrangement to the testing. Each answers a different question: what the marketer earned, whom the clinic was told to swab, and how an order appeared for that patient.

A clinic employee may know who gave the collect-everyone instruction. A marketer may know how the laboratory calculated compensation. A laboratory employee may see which intermediary supplied the samples and prescriptions. We work with that specific knowledge to connect the referral business to the Medicare claims it generated.

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

You Know Who Paid for the Swabs

If you know how DNA referrals became laboratory revenue, speak with our whistleblower experts about who paid for the swabs. We build your strongest laboratory fraud whistleblower case around the payments and testing you know, and bring in laboratory fraud whistleblower lawyers who understand genetic-testing referral schemes. We stay beside you as your knowledge becomes the foundation of the case.