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DNA testing scams in Florida, other states costing Medicare billions

Miami Herald logo Miami Herald 10/7/2019 By Jay Weaver, The Miami Herald

Armed with cotton swabs, battalions of healthcare marketers are swooping into senior centers, health fairs and parking lots in Florida and other places to prey on unsuspecting elderly citizens for DNA samples, federal authorities say.

They’re also soliciting seniors over the phone and through social media on the internet.

Many vendors then turn over the cheek swabs to clinical laboratories, which authorities say pay kickbacks for the referrals to fleece the federal Medicare program for costly genetic tests that patients largely don’t need or even know are billed in their names.

While authorities caution that the expanding genetic-testing industry has many legitimate operators, there’s a rising number of scofflaws in the field making it the fastest-growing area of Medicare fraud. And it’s costing the U.S. government billions in taxpayer dollars.

Genetic testing, which entails the examination of a person’s DNA to predict risks for cancer, dementia and other diseases, has become so corrupted by racketeers that the Justice Department recently unveiled its first nationwide take-down of 35 suspects accused of fraudulently billing $2.1 billion to Medicare. Nine doctors, accused of writing prescriptions in exchange for kickbacks, were among those arrested last month.

It is the latest viral-like scam to infect the U.S. government’s health insurance system for senior citizens — a program that helps tens of millions of Americans but also has suffered from widespread fraud for decades involving false claims for medical equipment, HIV-infusion drugs, home healthcare and psychotherapy services. South Florida, as usual, is at the forefront of genetic-testing schemes, authorities say, but they extend far beyond this region.

Federal law enforcement and regulatory agencies first started seeing an increase in genetic-testing claims to Medicare and keeping an eye out for fraud five years ago.

“But in 2018 we started to get an explosion of complaints [from Medicare beneficiaries],” said Shimon Richmond, assistant inspector general for investigations at Health and Human Services’ Office of Inspector General. He called genetic-testing scams a “pervasive problem all over the map,” prompting the federal agency to start issuing fraud alerts over the summer.

Complaints about genetic-testing fraud soared to 50 a week compared to one a week, said Richmond, the former special agent in charge of HHS-OIG’s office in South Florida. “This is an ever-growing problem because of the intersection of technology and medicine,” he told the Miami Herald. “It’s a big challenge. ... We’re trying to ensure that legitimate tests are covered while preventing as much of this fraud as possible.”

In recent years federal agents with HHS-OIG and the FBI have made a handful of genetic-testing criminal cases, but the take-down carried out in late September signaled a significant escalation of scams across the country.

One of the biggest was in South Florida. Richard Garipoli, 42, the owner of a telemedicine company called Lotus Health in Loxahatchee, was charged with defrauding Medicare and receiving kickbacks while collaborating with labs that billed more than $326 million for Cancer Genomic tests, known as CGx tests. The Medicare program paid more than $84 million to the labs, located in Georgia and Pennsylvania, which in turn paid kickbacks to Garipoli and other unnamed co-conspirators between January 2017 and September 2019, according to an indictment.

“Doctors contracted with Lotus Health allegedly authorized bogus doctors’ orders that CGx tests were medically necessary when the doctors did not engage in treatment of the [Medicare] beneficiaries, had no physician-patient relationship with them, and often did not even speak with the beneficiaries for whom they ordered the tests,” according to a Justice Department statement.

The genetic tests, which cost about $10,000 each on average, were not medically necessary and therefore not eligible for Medicare reimbursement, said Justice Department trial lawyers James Hayes and Tim Loper, who are seeking to recover more than $3 million in Medicare proceeds from Garipoli.

A defense attorney for Garipoli, who was released from federal custody Wednesday on a $500,000 bond and faces arraignment on Oct. 16, says his client is a legitimate businessman who committed no crimes against the government’s healthcare program.

Attorney Simon Steckel said Garipoli’s telemedicine business matched up Medicare patients with doctors for the genetic tests and then the DNA cheek swabs were turned over to labs for evaluation to determine if there was a hereditary risk for cancer or other terminal illnesses. Garipoli’s company didn’t bill Medicare, he said. The labs did.

“We are going to be able to show that hundreds of satisfied patients contracted for these services and received them,” Steckel said. “Our position is that the money he’s receiving from the labs is not kickbacks. It’s legitimate income.”

Another federal indictment accuses a Gainesville doctor of ordering genetic tests for hundreds of patients — most from New Jersey who received $75 gift cards from marketing companies to persuade them to turn over DNA cheek swabs to labs that billed Medicare, authorities say. Last year, the federal program paid a network of labs about $4.6 million for genetic tests that the Gainesville doctor allegedly ordered without seeing the patients. Five business people operating telemedicine companies and labs in Florida and other states were also charged in the healthcare fraud conspiracy.

In addition, federal prosecutors filed genetic-testing cases in Georgia, South Carolina, Texas and Louisiana as part of the latest Medicare fraud take-down.

On Friday, the owner of a Tampa-area medical marketing company was sentenced to nearly six years in prison on healthcare fraud and kickback charges for providing DNA swabs from Medicare patients in Miami to a lab for genetic testing. The patients were given food and other inducements to provide the swabs in the $2.2 million Medicare fraud scheme, while the Tampa business owner, David Brock Lovelace, 49, paid kickbacks to the Miami clinic owners and received similar payments from the lab for his referrals, according to the Justice Department. The Miami patients never saw the test results.

HHS-OIG’s Richmond said that these cases, involving purported genetic-testing services offered by phone, on the internet or in person, generally extend beyond a state’s borders. “It’s more difficult to classify hotter spots [of the country] because you may have a lab in Georgia doing tons of billing, but the majority of the patients are in South Carolina, Pennsylvania or Florida,” he said.

Florida, especially the Miami and Tampa areas, have long been recognized as incubators for all types of Medicare fraud.

Officials with the Florida Department of Elder Affairs said the agency received a federal grant of $475,000 to work with about 500 Senior Medicare Patrol volunteers across the state to educate and warn senior citizens about genetic-testing and other scams.

Anne Chansler, the agency’s director of elder protection, said senior citizens should be on guard against any healthcare vendors who try to solicit DNA cheek swabs under any circumstances, whether it be at a health fair, in a supermarket parking lot or over the internet. If anyone is concerned about a family history of cancer or dementia, a Medicare beneficiary should consult with a doctor, undergo an evaluation, have the cheek swab done and review the lab results with the physician, Chansler said.

“The reach is endless,” she said, referring to the locations visited by unscrupulous vendors to hit up seniors. “If it’s not your doctor, don’t do it. ... Never give out your Medicare information.”

Chansler said that senior citizens not only run the risk of being exploited for Medicare fraud but that their identities and Social Security numbers could be used for financial scams. “We’re really pushing the guard your card [defense],” she said.

Chansler also said senior citizens or their family members need to scrutinize so-called Medicare explanation of benefits to ensure their card is not wrongly used to bill the federal program for false claims. She said Medicare beneficiaries should be on the lookout for such suspicious genetic-testing items as “gene analysis,” “molecular pathology” or “laboratory” services.

And, she said, any Medicare beneficiary who had a cheek swab done without a physician should report it to state or federal authorities.

If you suspect Medicare fraud, contact the federal Office of Inspector General hotline at 1-800-HHS-TIPS, or the Florida Departmernt of Elder Affairs at 1-800-963-5337.


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