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Genetic Testing Scams are a New Type of Fraud

An alert has been issued by the US Department of Health and Human Services Office of Inspector General about a fraud scheme that involves genetic testing. The warning is for Medicare beneficiaries across the nation, and the federal government is working with law enforcement to put an end to the schemes. Already charges against 35 individuals have been brought for their alleged participation in healthcare fraud that accounts for $2.1 billion in losses nationwide. The scam is perpetrated on the Medicare system at large and individual level.

How does the scam typically work? First, the "recruiters" or "marketers" bogusly involve themselves with their targeted Medicare seniors. Typically, the scammer targets the victim through door-to-door visits, telemarketing calls, and booths at public events or health fairs. Some schemes even target retirement communities, offering free ice cream sundaes or gift cards to learn about this fantastic new genetic testing technology.

The deception begins with the offer of "free" screening, testing kit sent to your home via the mail, or an onsite cheek swab for genetic testing followed by obtaining the person's Medicare information for fraudulent billing activity or identity theft. If the scam artist (“recruiter”) is working with an unethical doctor, they will pay that doctor a kickback in exchange for ordering the test. Once the lab processes the test, Medicare will reimburse the lab, and the lab then shares the proceeds of that reimbursement with the scammer. Genetic testing fraud occurs when an analysis or screening is performed but not ordered by a Medicare beneficiary's treating physician and not considered medically necessary. If Medicare denies the claim, the recipient who permitted the screening becomes responsible for the entire cost of the test. The average price of personal genetic analysis ranges from $9,000 to $11,000.

Examples of genetic testing fraud can include, but are not limited to, the following screenings or tests:

  • Cancer and hereditary cancer

  • DNA