Access DX Agrees to $36.4 Million Settlement Over Alleged Genetic Testing Kickback Scheme

Key Takeaways

• $36.4 Million Settlement: Access DX agreed to resolve False Claims Act allegations that it paid illegal kickbacks and billed Medicare and Medicaid for medically unnecessary genetic testing.
• Alleged Fraud Scheme: The Justice Department alleged the laboratory paid marketers for patient referrals, unbundled billing codes, financed fraudulent telemedicine orders, and submitted false claims between January 2018 and January 2020.
• Five-Year Compliance Oversight: Access DX entered into a five-year Corporate Integrity Agreement requiring enhanced compliance controls, auditing, employee training, and oversight of referral relationships.

Deep Dive

For two years, according to federal prosecutors, the business model at Access DX Laboratory rested on finding more patients, ordering more genetic tests, and billing the government. The methods, the Justice Department alleges, included paying marketers for referrals, compensating telemedicine providers for fraudulent physician orders, breaking genetic tests into separately billable components, and sending Medicare and Medicaid the bill for testing that was not medically necessary. That alleged scheme has now produced a $36.4 million resolution.

The Department of Justice announced this last Thursday that Houston-based Access DX Laboratory agreed to settle allegations that it violated the False Claims Act through a wide-ranging genetic testing fraud scheme that operated from January 2018 through January 2020. Although the settlement also resolves claims against individuals connected to the case, the government's allegations center on the laboratory's role in generating referrals through illegal kickbacks and submitting false claims to federal healthcare programs.

Genetic testing has become one of the government's most closely watched corners of healthcare fraud enforcement, largely because sophisticated diagnostics can command high reimbursement rates while remaining difficult for public insurers to scrutinize in real time. Over the past several years, federal investigators have repeatedly targeted laboratories that allegedly turned telemedicine relationships and aggressive marketing networks into pipelines for unnecessary testing paid for by taxpayers.

The allegations against Access DX fit squarely within that pattern. Prosecutors contend the laboratory paid marketers in exchange for patient referrals, unbundled billing codes to increase reimbursement, and financed telemedicine consultations that produced physician orders the government characterizes as false and fraudulent. Those practices, the government alleges, ultimately led to claims for genetic testing that Medicare and Medicaid should never have paid.

The financial settlement is only one part of the resolution. Access DX also entered into a five-year Corporate Integrity Agreement with the U.S. Department of Health and Human Services Office of Inspector General, placing the company under a level of federal oversight that extends well beyond writing a settlement check. The agreement requires the laboratory to strengthen its compliance program through expanded auditing, employee training, accountability measures, and closer review of its relationships with referral sources.

Corporate Integrity Agreements have become a familiar feature of major healthcare fraud settlements. They reflect a recognition that enforcement is not intended simply to recover taxpayer money after misconduct has occurred, but to reshape how an organization operates once regulators conclude its internal controls have failed.

The case began not with a government audit but with a whistleblower lawsuit. Douglas Green, president of a Massachusetts marketing company retained to promote genetic testing to Medicare and Medicaid beneficiaries, filed the action under the False Claims Act's qui tam provisions, which allow private individuals to sue on the government's behalf and share in any recovery. Under the settlement, Green will receive $7.2 million.

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