November 2022 Enforcement Scorecard: UDTs and Genetic Tests

Continuing previous patterns, most of the settlements and enforcement actions taken against labs during September and October involved billing of medically unnecessary toxicology and genetic tests. Scams involving the latter tests often include payment of kickbacks to telehealth firms to find elderly patients and to physicians for ordering tests for those patients without anything approaching a full medical assessment of the patient’s individual condition or need for the tests. Outside lab testing, durable medical equipment (DME) abuses remain a primary target for the U.S Department of Justice (DOJ), Office of Inspector General (OIG) for the U.S. Department of Health and Human Services, and state attorneys general.

Here's a roundup of significant cases reported during the period:

Sept. 6: A California orthopedic surgeon was sentenced to seven years in prison after being convicted of 10 counts of healthcare insurance fraud in June. According to the California Attorney General, Dr. Gary Wisner “repeatedly” defrauded Medicare and Med-Cal for medically unnecessary X-rays, often X-raying his patients during even run-of-the-mill visits and X-raying body parts that had no relation to the patient’s condition.

Sept. 12: An Ohio doctor pleaded guilty to three charges for her role in a telehealth kickback scheme. Dr. Amy E. Swegan admitted to accepting $291,000 in kickbacks from telehealth companies, $30 per “consult,” and then approving cancer genetic tests, DME, and pain crème prescriptions for thousands of patients without regard to whether they were medically necessary.

Sept. 14: New York-Presbyterian/Queens Hospital agreed to pay over $2.5 million to settle allegations of performing and then billing medically unnecessary services. According to the DOJ, a physician formerly affiliated with the hospital performed surgical procedures to replace the batteries of patients’ implantable cardioverter defibrillator (ICD) pulse generators before they reached their elective replacement interval (ERI) expiration date.

Sept 14: Illinois-based pharmaceutical company Akorn Operating Company LLC settled claims of falsely billing Medicare Part D for three generic drugs that were no longer eligible for coverage. In addition to shelling out $7.9 million, the settlement required Akorn to admit that it delayed seeking the required FDA conversions for the Akorn generics from Rx-only to over-the-counter status.

Sept. 22: Philips RS North America LLC has agreed to pay $1.2 million to settle allegations of paying kickbacks for referrals of sleep and respiratory DME. The DOJ contends that Philips, formerly known as Respironics, Inc., helped a DME supplier/referral source secure a 12-month, interest free-loan fully guaranteed by Respironics. The company also had to enter into a five-year corporate integrity agreement with the OIG.

Sept. 27: Northeast Indiana’s Parkview Health System agreed to pay $2.9 million to resolve charges that its hospitals used improper revenue codes when submitting claims to Medicaid for blood-clotting tests, resulting in overbilling.

Sept. 28: A Washington doctor pleaded guilty for his role in a genetic testing telehealth fraud scam. Christopher B. Bjarke, 61, admitted to receiving $167,996 in kickbacks in exchange for ordering $18.6 million worth of genetic tests for patients with whom he had no physician-patient relationship, other than a brief telephone call arranged by telemarketers.

Oct. 3: Toxicology lab Radeas LLC agreed to pay $3.6 million to the state of North Carolina to settle charges of falsely billing Medicaid for presumptive and definitive urine drug testing (UDT). The latter, which measures amounts of a drug or other foreign substance and is far more expensive, is deemed medically necessary only when the former detects that the substance is present to begin with. The new settlement is in addition to the $11.6 million Radeas has already shelled out to settle federal charges involving the same matter.

Oct. 5: Speaking of UDT billing scams, pain management company Physicians Group Services, P.A. (PGS) will pay $700,000 for doing the same thing to the Florida Medicaid Program that Radeas did to Medicaid in North Carolina, that is, bill for medically unnecessary definitive UDTs performed on a blanket basis without determining whether it was necessary for the patient.

Oct. 6: Jamie McCoy, 42, the owner and operator of several Missouri-based DME companies, was sentenced to 30 months in prison and ordered to repay $7.5 million for his role in a kickback scheme involving ads offering free orthotic braces that were subsequently billed to TRICARE, Medicaid, and Medicare.

Oct. 12: Ariel Madero Paez, 56, the owner of Florida-based Always Medical Supply, will spend 55 months behind bars followed by three years of supervised release for falsely billing Medicare for DME that was medically unnecessary and, in some cases, not even provided.