There is an alarming trend that has arisen over the past few months in the laboratory sector, directly recruiting Medicare patients to do expensive genomics testing, while earning high commissions from the laboratories performing these tests.

The scam works by having individuals organize “health fairs”, doing a short questionnaire with the patient, taking the DNA sample, then having a telemedicine doctor rubber-stamp the requisition form. There is an intermediary between the laboratory and the representative, so the laboratories engaging in this are either ignorant of what’s going on, or they are greedy and are looking the other way.

To anyone working in the ancillary sector, this would appear to be a suicide mission. Directly recruiting patients and receiving a kickback (aka “commission”) for the tests performed is a textbook case of Medicare fraud.

Worse yet, some of this activity is done under a multi-level marketing (MLM) model, where there are layers of individuals earning kickbacks on each Medicare reimbursement.

The phone calls that our company has received have exclusively been from individuals from outside the medical sector who do not realize the danger of their actions. Many of the folks we’ve spoken to had previous experience selling insurance, cars, mortgages, and other non-medical sector products. They are typically not trained on compliance and will often do and say a lot of things that are clearly in violation of existing statutes.

Of course, the companies promoting this model are quick to point out the loopholes that exist, insisting that they have a legal basis for engaging in this practice. Having spent a decade in this sector, I can attest that there is no shortage of people who claim to have outsmarted CMS and the OIG.

USE COMMON SENSE

Why do most laboratories shy away from accepting tests from telemedicine doctors? Why are you, a former (insurance agent/car salesman/mortgage broker, etc) ordering diagnostic testing?

This is a fool’s errand. If you are participating in one of these programs, you are being exploited.

I have spoken with a handful of laboratory owners who have told me that they have also been approached by individuals to participate in this scam. One owner was so appalled that he already contacted the OIG to look into the matter.

Ultimately, this will come crashing down.