Attorney Advises Labs to Track Genetic Test LCDs

Cardiovascular genetic testing raises fraud-related concerns when coupled with telemedicine services

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CEO SUMMARY: Skyrocketing numbers of genetic test referrals and telehealth claims since 2016 are getting the full attention of both federal prosecutors and auditors from Medicare and private health insurers. The DOJ has filed criminal cases against a growing number of telehealth providers. Genetic testing lab companies are often charged in the same criminal cases.

CLINICAL LABORATORIES PERFORMING GENETIC TEST based on test orders generated from telemedicine consults may find themselves at higher risk of payer audits and even federal prosecution. That’s becoming a common element in a growing number of federal criminal fraud indictments.

“Prior indictments in years past have mentioned telemedicine, but haven’t truly focused on it,” said Danielle Tangorre, JD, a partner at law firm Robinson & Cole LLP in Albany, N.Y. “That’s changed, because with these new federal indictments, there’s this common thread of telemedicine. And then it just spawns out from there to include clinical laboratories and others. That speaks volumes to the government’s focus. So, I think this is just the start of the indictments that we’re going see in the telemedicine space that also ensnare clinical labs providing lab tests to telemedicine providers.”

In some of the investigations, which The Dark Report details here, the U.S. Department of Justice (DOJ) alleged that a slew of defendants defrauded the federal government by ordering or referring medically-unnecessary genetic cardiovascular lab tests for patients. Often, these alleged actions occurred via telemedicine visits.

Genetic Testing Concerns

Though it is not clear what prompted the DOJ’s investigations into genetic tests, Tangorre pointed to clues in a report published in December 2021 by the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services. That report chronicled the rise in referrals and payments for genetic tests from 2016 through 2019. For example, Medicare payments for genetic tests quadrupled during that 48-month period, to $1.4 billion in 2019.

In a press release about the indictments, the DOJ characterized fraudulent cardiovascular genetic testing as a “burgeoning scheme” in healthcare fraud.

Danielle Tangorre, JD, a partner at law firm Robinson & Cole LLP
Danielle Tangorre, JD

Tangorre said she suspects such testing has further risen in volume since 2019. “Notably, the OIG report detailed some testing related to the cardiovascular disease profile,” she observed. “We don’t know current volume of that testing because the same data hasn’t been published from 2020 to now. But with the DOJ saying cardiovascular genetic testing fraud is a ‘burgeoning scheme,’ the question is whether such tests have now topped some of the other cancer genetic testing that was previously on the list.”

Tangorre noted that it would be wise for clinical laboratories to monitor local coverage determinations (LCDs) for genetic services, particularly LCDs made by Medicare Administrative Contractors (MACs) about genetic tests.

Coverage Determinations

“Labs need to keep on top of the coverage determinations,” Tangorre warned. “In the infectious disease testing space, an LCD went into effect recently which lists specific criteria for who can order the test. The same might happen for a cardiovascular test that’s under review. These LCDs include specific criteria for when the test is appropriate and when it’s medically necessary.”

For example, proposed LCD DL39082—which covers genetic testing for cardiovascular disease—lists restrictions, including that such a test is not considered medically necessary for asymptomatic patients.

Tangorre said laboratories also should consult a new Special Fraud Alert, “OIG Alerts Practitioners to Exercise Caution when Entering into Arrangements with Purported Telemedicine Companies.” Released on July 20, the OIG alert outlines seven characteristics of telemedicine that might point to fraud. (See the sidebar for more details.) “Looking at the suspect characteristics is a great way for labs to review compliance,” Tangorre said.

“In the Special Fraud Alert and the criminal indictments, the OIG has flagged tests that physicians ordered without patient interaction or with only brief telephonic conversations,” she said. “Labs must ensure that when they submit the bills and attest to the accuracy of the billing, that the test has been properly ordered.”

Contact Danielle Tangorre at dtangorre@rc.com.

Seven Characteristics of Telemedicine Fraud

OUTLINED IN THE FEDERAL GOVERNMENT’S RECENT SPECIAL FRAUD ALERT about telemedicine are seven characteristics that may suggest a heightened risk of fraud: 

    • Purported patients for whom a practitioner orders services were identified or recruited by a telemedicine or telemarketing company, sales agent, recruiter, call center, health fair, or through internet, television, or social media advertising for free or low, out-of-pocket cost.
    • A practitioner does not have sufficient contact with or information from the purported patient to meaningfully assess the medical necessity of the services ordered.
    • A telemedicine company compensates a practitioner based on the volume of services ordered, which may be characterized to the practitioner as compensation based on the number of purported medical records that the practitioner reviewed.
    • A telemedicine company only furnishes services to federal healthcare program beneficiaries and does not accept insurance from any other payer.
    • A telemedicine company claims to only furnish services to individuals who are not federal healthcare program beneficiaries but may in fact bill federal healthcare programs.
    • A telemedicine company only furnishes one product or a single class of products (e.g., only genetic testing), potentially restricting a practitioner’s options to a predetermined course of treatment. 
    • A telemedicine company does not expect practitioners to follow up with purported patients, nor does it provide practitioners with the information required to follow up with purported patients (i.e., the company does not require practitioners to discuss genetic testing results with each purported patient).

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