Myriad Genetics Pays $9.1 Million to Settle Hereditary Cancer Test False Billing Claims

In March 2018, Myriad Genetics got a piece of mail no lab provider ever wants to see in its inbox: an OIG subpoena asking for billing records in connection with "an investigation into possible false or otherwise improper claims for payment under Medicare and Medicaid." At issue were claims for what was then Myriad's new myRisk Hereditary Cancer test over a 39-month period starting in Jan. 1, 2014. And now, in its most recent Form 8-K filed with the US Securities and Exchange Commission (SEC), Myriad reveals that it has agreed to settle the claims for $9.1 million.

The Billing Controversy

Launched in September 2013, the Myriad myRisk Hereditary Cancer is a 25-gene panel that blends genetic test status and personal/family cancer history to identify clinically significant mutations affecting inherited risks for eight hereditary cancers launched in September 2013. The billing problems may have stemmed from Myriad's use of CPT Code 81211, which describes full sequencing analysis of BRCA genes together with CPT Code 81213, describing duplication and delection analysis of the genes.

Explanation: As reported by GenomeWeb, CMS had issued coding edits to keep labs from stacking these codes, which together amounted to approximately $2,900 in payment, and guided industry to use the substantially lower-paying CPT Code 81162 (comprehensive analysis of BRCA 1/2) instead. CPT Codes 81211 and 81213 should be used only if there's a modifier indicating that separate services have been performed on different days, advised CMS. The new CMS coding policy and attendant pay cut was bad news for a company as dependent on Medicare payments as Myriad (which reportedly gets roughly 8% of its hereditary cancer revenues from Medicare).

The Settlement

The legal case began as a whistleblower lawsuit accusing Myriad of violating the False Claims Act (FCA). As Myriad noted in the SEC Form 10-K it filed after getting the OIG subpoena 17 months ago, potential penalties under the FCA include payment of up to three times the damages sustained by the government, civil penalties ranging from $5,500 to $11,000 per false claim and exclusion from the federal health care programs.

Myriad denies any wrongdoing. And according to Myriad's new 8-K filing, after its 17-month investigation, the DOJ has decided not to intervene in the case. Even so, the firm has chosen to shell out the $9.1 million "to avoid a lengthy and distracting litigation with the relator." Myriad added that it "believe it demonstrated that the key allegations made in the complaint were false" and that said it doesn't expect to have to make any changes to its billing practices.