Genetic Testing Gone Bad

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close up of word medicare block letter

A Pennsylvania lab owner is pleading guilty to charges around a Medicare fraud scheme that yielded approximately $60 million in reimbursements to his labs in less than a year. Ravitej Reddy paid out-of-state marketing companies to convince thousands of Medicare patients to submit samples for genetic testing. He then paid kickbacks to a Georgia telemedicine company for bogus prescriptions for the testing. A U.S. Attorney called the operation a “sophisticated, nationwide kickback scheme.”

Reddy and his co-conspirators took advantage of the fact that his labs are located in a Medicare coverage area offering the highest reimbursement rates in the U.S. (Getting the biggest bang for his fraud… and taking the most bucks from Medicare.) Reddy was charged in November 2019 with two counts of conspiracy to pay and receive kickbacks, one count of conspiracy to pay kickbacks, and one count of offering and paying kickbacks.

Reddy’s Medicare fraud resulted in about $127 million in billing between May 2018 and April 2019 – even though the samples were tested by other labs, because his Pennsylvania facilities lacked the proper equipment. (Not to mention that the patients duped into the testing didn’t need it in the first place.) Sentencing is pending.

Today’s Fraud of the Day comes from a Pittsburgh Post-Gazette article, “Owner of local genetic testing labs set to plead guilty in kickback scheme,” published Dec. 10, 2019.

PITTSBURGH, Pa. – A resident of Monroeville, Pennsylvania, was charged in federal court with three conspiracy counts and one substantive count related to the payment of unlawful kickbacks, United States Attorney Scott W. Brady announced today.

Ravitej Reddy, 52, was charged by criminal Information with two counts of conspiracy to pay and receive kickbacks, one count of conspiracy to pay kickbacks, and one count of offering and paying kickbacks.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.