The U.S. Attorney’s Office for the Eastern District of Pennsylvania announced on April 23 that Genexe, LLC (doing business as Genexe Health) and its parent company, Immerge, Inc., along with two of their executive officers/owners, Jason Green and Jason Gross, collectively agreed to pay $6 million to settle claims that they violated the False Claims Act (FCA), the Anti-Kickback Statute (AKS), and other statutes in connection with a fraudulent scheme that involved billing Medicare for medically unnecessary genetic tests.
Medical professionals use genetic tests to help identify inherited mutations in a patient’s genes which may affect a patient’s risk of developing certain diseases (e.g., a predisposition to cancer) or how a patient might react to certain medications. Generally, genetic tests involve collecting a patient’s DNA sample (e.g., saliva) and then submitting it to a medical laboratory for analysis. The medical provider also needs to confirm that the genetic test is medically necessary.
For a genetic test to be reimbursable under Medicare, it must be ordered/prescribed by a medical professional who is treating a patient for a specific medical condition, and the test must be reasonable and medically necessary in connection with the diagnosis or treatment of the patient’s medical condition.
The Government alleged that Genexe, Immerge, Green and Gross violated the FCA and the AKS by knowingly and improperly causing false claims to be submitted to Medicare for genetic tests that were not medically necessary, and that were procured through illegal kickbacks. It was alleged that from July 2018 through December 2019, Genexe paid individuals (most of whom had no medical training) to recruit Medicare beneficiaries (typically at non-medical locations like shopping malls) to sign up for medically unnecessary genetic tests, collect their DNA samples and protected health information and then ship these packages to Immerge. Once received, Genexe paid illegal kickbacks to medical providers and telemedicine providers in order to obtain prescriptions for the genetic tests, and then send the samples to medical labs for testing. The labs billed Medicare for the testing and in turn paid Genexe a portion of the reimbursement. The labs often received $6,000 or more per test, and Genexe’s portion ranged from $800 to $2,000 per test. In some cases, the labs also paid illegal kickbacks to Genexe, Immerge, Green and Gross in exchange for sending the genetic tests to the lab.
The settlement resolved two lawsuits filed by whistleblowers under the FCA, which resulted in four private parties collectively receiving approximately $1.3 million as their share.
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