Genetic Testing Fraud Defense

You ran a lab, marketed for one, or signed test orders as a physician, and now federal agents are asking about cheek swabs, Medicare billing, and the people who sent you patients. Genetic testing fraud is one of the most aggressively prosecuted healthcare fraud schemes in the country, and the Southern District of Florida is one of its main stages. If you have received a target letter, a subpoena, a civil investigative demand, or a visit from HHS-OIG or the FBI, you are already inside an investigation that has probably been running for a year or more.

This page explains how these cases are built, what the government has to prove, and what the earliest moves are worth. It is written for the person who is worried right now, not for a law review.

Why the government treats genetic testing as fraud

Genetic testing itself is legal and often valuable. The prosecutions are not about the science. They are about two things: whether Medicare should have paid for the test, and whether someone paid or received money to generate the order.

The pattern federal prosecutors charge looks like this. A marketing company or call center reaches Medicare beneficiaries, often the elderly, at health fairs, senior centers, by phone, or online. The beneficiary gives a DNA swab. A telemedicine doctor who never meaningfully treats the patient signs an order for an expensive cancer genomic (CGx) or pharmacogenetic (PGx) panel. A laboratory bills Medicare thousands of dollars per test. Money then moves between the lab, the marketers, and sometimes the ordering doctors. The government calls the swab collection and the doctor signature a paperwork shell around a billing operation.

You do not have to be the lab owner to be charged. Prosecutors have indicted lab owners, marketing company principals, patient recruiters, telemedicine physicians, and call center operators in the same case.

How these investigations start

Genetic testing cases almost always begin with data, not a witness. Medicare billing analytics flag a lab or an ordering provider whose CGx or PGx volume is a statistical outlier. From there the government pulls billing records, bank records, marketing contracts, telemedicine platform logs, and the orders themselves. HHS-OIG, the FBI, and often the Secret Service or IRS Criminal Investigation work the financial trail. By the time agents contact you, they usually have the paper. What they are looking for from you is intent.

What the government has to prove

Most genetic testing cases are charged under the federal health care fraud statute, 18 U.S.C. 1347, and the Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b), usually tied together with a conspiracy count under 18 U.S.C. 1349 and wire fraud under 18 U.S.C. 1343. When a laboratory is involved, the government also uses the Eliminating Kickbacks in Recovery Act, 18 U.S.C. 220 (EKRA), which reaches lab referral payments even outside Medicare and Medicaid.

To convict, the government must prove you acted knowingly and willfully, not that a test was unnecessary in hindsight. That word, willfully, is where these cases are won and lost. A lab that relied on ordering physicians, a marketer who believed they were paid for advertising and not for referrals, or a doctor who thought a telehealth consult was legitimate is not automatically a criminal. The government has to prove you knew the arrangement was improper and did it anyway.

The penalties are not just prison

Health care fraud under Section 1347 carries up to ten years per count, and up to twenty years if patient harm is alleged. Each Anti-Kickback violation adds up to ten years. On top of the criminal case, the government pursues forfeiture of the money, and civil liability under the False Claims Act, 31 U.S.C. 3729, which allows treble damages and per-claim penalties. For any licensed provider, a conviction, and often just an indictment, triggers exclusion from Medicare and Medicaid and action against your professional license. The collateral consequences frequently outweigh the sentence.

How these cases are defended

Attack the kickback theory. The line between a legitimate marketing or MSO arrangement and an illegal kickback is often blurry, and it is the government's burden. Fixed-fee marketing, bona fide employment, and personal services arrangements can fall inside Anti-Kickback safe harbors. We test every payment the government calls a kickback against the statute and the safe harbor regulations.

Attack knowledge and intent. In a multi-party scheme, most clients sat at one node and did not see the whole picture. We build the record that shows what you actually knew, what you were told, and what you reasonably relied on, including advice of counsel and compliance steps.

Attack medical necessity case by case. The government likes to argue necessity in bulk with statistics. Necessity is a patient-by-patient question. Independent experts can defend the orders the government lumps together. The same fight runs through DME cases, where the government proves necessity with volume rather than charts.

Separate the billing from the client. In many cases the laboratory did the billing, not the marketer or the doctor. Who submitted the claim, and who profited from it, matters to both guilt and loss amount.

Why moving early matters

Genetic testing cases are built slowly, which means there is usually a window before charges are filed. That window is the single most valuable asset you have. Pre-indictment, defense counsel can meet with the prosecution team, shape how the government sees your role, present the compliance facts, and in some cases keep a client from being charged at all or move them from defendant to witness. Once the indictment is returned, that flexibility is largely gone. Waiting for the government to make the first formal move is the most common and most costly mistake in this area.