U.S. agents raid genetic testing labs, charge 35 in Medicare fraud probe

WASHINGTON/LAWRENCEVILLE, Ga. (Reuters) – U.S. federal agents
raided genetic testing laboratories, and 35 people were criminally
charged in four states in a crackdown on genetic testing fraud that
officials said on Friday caused $2.1 billion in losses to federal
healthcare insurance programs.

Officials at the Justice Department and Health and Human
Services Department Office of the Inspector General said charges
were filed in Florida, Texas, Louisiana and Georgia in “one of the
largest healthcare fraud schemes ever charged.”

Among those facing charges was Khalid Satary of Suwanee,
Georgia, owner of Clio Laboratories in Lawrenceville, Georgia, who
was accused in an indictment of soliciting medically unnecessary
genetic cancer tests and paying illegal bribes and kickbacks.

Satary is a convicted felon who previously also ran a toxicology
lab that went bust in 2016 amid an ongoing federal probe into
illegal kickbacks.

Several labs connected to Satary including Clio were featured in
a special report by Reuters on Wednesday that raised questions
about Clio’s Medicare billing practices and whether genetic tests
the lab performed on elderly people were medically necessary.

A Reuters journalist early on Friday witnessed agents from the
FBI and the U.S. Department of Health and Human Services inspector
general’s office search Clio, Elite Medical Laboratories and
medical billing company Laboratory Experts, which are all located
in the same business complex.

All three of those companies are connected to Jordan Satary, the
son of Khalid Satary. Neither father nor son could be reached for
comment.

Victoria Nemerson, Clio’s general counsel, did not respond to
requests for comment. Nemerson previously said Clio’s testing is
proper and that the firm commits “substantial time and resources to
meeting our legal duties.”

The use of genetic testing, which helps people determine their
risks of developing cancer and other diseases, has skyrocketed in
the United States since 2015.

For Medicare, the public insurance program for elderly and
disabled Americans, payouts for genetic tests jumped from $480
million in 2015 to $1.1 billion in 2018, a Reuters analysis
found.

Genetic testing has sparked more than 300 federal investigations
involving healthcare fraud and illegal kickbacks.

The fraud schemes at issue in Friday’s announcement typically
involved marketers’ hiring sales reps to get elderly people to
provide a cheek swab that they are told could be tested to help
them understand their risks of developing cancer or whether their
genetics could unlock clues about how they will respond to drug
treatments.

Doctors signed off on the tests as being medically necessary,
and the swabs were sent for testing to labs that sought Medicare
payments.

But many of the lab tests are not relevant to the patient’s
history, and some of the doctors sign off on the results without
conferring with the patient, investigators say.

By law, all diagnostic lab tests must be ordered by a doctor
treating a patient for a specific condition.

Others charged included Minal Patel, the founder of
Georgia-based LabSolutions, and Jamie Simmons, the founder of two
telemedicine companies called MedSymphony and Meetmydocc LLC.

Lawyers for Patel and Simmons could not be immediately
reached.

Patel is accused of defrauding the Medicare and Medicaid
insurance programs in connection with genetic cancer tests and
paying kickbacks. Simmons is charged with conspiring to commit
healthcare fraud and paying and receiving kickbacks that led to
Medicare billings of more than $56 million.

A Reuters analysis of Medicare Part B billing data showed that
LabSolutions dramatically increased invoices for genetic testing
from $292,303.56 in 2015 to $68.2 million in 2017.

The Justice Department said that in total, LabSolutions billed
Medicare programs more than $494 million in connection with
medically unnecessary cancer genetic tests.

Clio and several other labs controlled by Khalid Satary in
Louisiana, Georgia and Oklahoma collectively billed Medicare more
than $547 million for medically unnecessary tests, the government
said Friday.

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