Acting United States Attorney Dylan J. Steinberg announced on July 7, 2025, that the United States had filed a civil complaint under the False Claims Act against a Delaware physician, alleging that she caused the submission of false claims to Medicare for medically unnecessary genetic laboratory tests.
According to the complaint, between April 2019 and November 2019, the defendant referred more than 100 Medicare beneficiaries for genetic testing that was not medically necessary. Medicare covers diagnostic laboratory tests, including genetic tests, only when they are ordered by a treating physician for a specific medical condition and the results are used in managing that condition.
The United States alleges that the defendant had no medical relationship with the beneficiaries referred for testing, did not examine them, and did not use the test results in their treatment. Her referrals were based on brief telemedicine consultations and, in some instances, no consultation at all. The genetic tests that she ordered often cost thousands of dollars per patient, and were paid for by Medicare.
Special Agent in Charge Maureen R. Dixon of the US Department of Health and Human Services Office of Inspector General (HHS-OIG) stated, “HHS-OIG will continue to work with our law enforcement partners to investigate those who allegedly participate in fraud schemes driven by greed and apathy for the laws intended to safeguard Medicare funds. We are unwavering in our dedication to ensuring the integrity of federal healthcare programs.”
Compliance Perspective
Issue
Medicare does not cover the costs of genetic tests that are not reasonable and necessary for the diagnosis or treatment of illness. To be covered, a diagnostic laboratory test, including genetic testing, must be ordered by the treating physician for a specific medical condition and used in the management of that condition. The False Claims Act (FCA) allows the government to recover funds when false or fraudulent claims are submitted, or caused to be submitted, for payment to federal programs such as Medicare and Medicaid. Violations of the FCA may result in liability for up to three times the government’s losses, plus civil penalties of up to $11,000 per false claim. Because each submitted claim may constitute a separate violation, penalties can accumulate quickly.
Discussion Points
- Review your policies and procedures for preventing and reporting false claims. Ensure they include appropriate safeguards for Medicare Part B billing, such as verifying medical necessity, confirming physician orders, and maintaining accurate documentation. Policies should be reviewed at least annually and updated as needed to reflect new regulations or guidance.
- Train all staff upon hire and at least annually on your compliance and ethics policies, including what may constitute a false claim. Staff involved in billing or coding for Medicare Part B services should receive additional training focused on documentation, claim accuracy, and regulatory requirements. Compliance and ethics committee members should receive periodic updates on enforcement trends and emerging risks.
- Conduct regular audits to ensure staff understand their responsibilities and are following proper procedures for identifying and reporting potential compliance issues. For Medicare billing, audits should be used to detect and correct errors before claims are submitted. Audit findings should be documented, and any identified issues should be addressed promptly.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*