An Indian national indicted for healthcare fraud made his initial appearance in US District Court in Seattle on May 9, 2025, Acting US Attorney Teal Luthy Miller announced. He was arrested on April 10, at Chicago O’Hare International Airport while attempting to board an international flight. The defendant is charged with healthcare fraud and conspiracy to commit healthcare fraud in connection with the operation of a diagnostic testing laboratory in Everett, Washington.
According to the indictment, he conspired with others to bill Medicare for COVID-19 and other respiratory illness tests that were neither ordered nor performed. The laboratory was formed in October 2021 and dissolved in March 2025. Washington Department of Health records show that its license as a Medical Test Site expired in December 2023. The defendant is listed in filings with the state and with Medicare as the laboratory’s owner and director.
Claims data from April to December 2024 show the laboratory billed Medicare for more than $8.7 million in testing services. Medicare paid over $1.1 million of those claims. Between June 2024 and March 2025, Medicare received over 200 complaints about the lab, many alleging that testing was billed but never received. For example, one enrollee reported that Medicare paid $545 for COVID-19 tests in August 2023 and March 2024, though they had not undergone testing on those dates.
Several beneficiaries also reported being billed for tests they never received. Physicians listed as having ordered tests stated they had not referred those patients, and many patients reported not recognizing the referring physician’s name. In some cases, the lab billed for testing services on dates after the patient had died. In other cases, the referring physician was deceased at the time the test was supposedly performed.
Financial records indicate the defendant received multiple checks and made withdrawals from the lab’s bank account, which he controlled. In May 2024, he withdrew $260,000. Shortly afterward, he returned to India. At that time, he had been in the US on a student visa. He reentered the US in March 2025 as the investigation into the fraud was advancing. Prosecutors and agents from the US Department of Health and Human Services Office of Inspector General (HHS-OIG) and the Federal Bureau of Investigation (FBI) drafted a criminal complaint and took him into custody.
The defendant is alleged to have conspired with others to carry out the fraud. These individuals are not named in the indictment or complaint. The investigation remains ongoing.
“Medicare provides critical funding for senior citizens’ healthcare needs, which makes this type of fraud all the more reprehensible,” said Acting US Attorney Miller. “This case stands as an example of how federal law enforcement is working diligently to protect those critical tax dollars from fraud schemes.”
Compliance Perspective
Issue
All laboratory tests performed for residents must be medically necessary to be billed to Medicare, Medicaid, or private insurance. Medical necessity is established when test results are needed to diagnose or treat an illness, injury, condition, disease, or associated symptoms. Submitting claims for tests that do not meet this standard may violate the False Claims Act and result in fines, criminal charges, or other sanctions.
Discussion Points
- Review your policies and procedures related to laboratory testing services, including billing practices and processes for preventing and reporting false claims. Ensure procedures clearly define responsibilities and expectations for confirming medical necessity before tests are ordered or billed.
- Train staff to recognize and confirm medical necessity for all ordered tests. Clarify that questionable orders should be reviewed before proceeding. Include your medical director in this effort so he or she can intervene if a provider is not appropriately determining medical necessity for residents. Include information on how to report concerns and suspected violations, and reinforce that prompt reporting is required.
- Periodically audit to confirm that ordered laboratory tests meet medical necessity standards. Assess staff understanding of medical necessity through periodic surveys or spot checks. Use audit results to guide targeted education and corrective action, as needed.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*