On April 23, the U.S. Attorney for the Eastern District of Pennsylvania announced that genetic testing marketing companies Genexe, LLC, Immerge, Inc., and two executives with ownership interests in the companies, agreed to pay $6 million to resolve allegations that they violated the False Claims Act through a fraud scheme involving illegal kickbacks and medically unnecessary genetic tests charged to Medicare.
The settlement stems from qui tam lawsuits filed by four whistleblowers who are set to receive approximately $1.3 million in total.
According to the DOJ, Genexe, Immerge, and the executives (Jason Green and Jason Gross) “would pay remuneration to IBOs [independent contractors] for referrals of Medicare beneficiaries and to medical providers for prescriptions for CGx and PGx testing, obtain Medicare patient information and swabs by having Medicare beneficiaries complete genetic test kits, and would obtain prescriptions for CGx or PGx testing for those beneficiaries by paying illegal kickbacks to medical providers or telemedicine providers.”
“Genexe, Immerge, Green, and Gross also received illegal kickbacks in exchange for sending the completed CGx and PGx testing swabs and prescriptions to medical laboratories for processing and billing,” the government further alleges.
“Genetic testing fraud preys on the fears of patients, and it wastes taxpayer dollars by spending limited funds on medically unnecessary or nonexistent tests,” said U.S. Attorney David Metcalf. “This settlement shows we will work with our law enforcement partners to investigate fraud, waste, and abuse in federal healthcare programs and will use every tool available to recover improperly paid taxpayer funds.”
The False Claims Act’s qui tam provisions enable private citizens and private parties to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery.
During FY 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion and over $2.4 billion of the recoveries stemmed from qui tam whistleblower lawsuits. Furthermore, according to the government, a record 979 qui tam lawsuits were filed in FY 2024.
However, in September 2024, a district judge in Florida ruled that the False Claims Act’s qui tam provisions were unconstitutional. The U.S. federal government is urging the U.S. Court of Appeals for the Eleventh Circuit to reverse that decision, stating in a brief that “other than the district court here, every court to have addressed the constitutionality of the False Claims Act’s qui tam provisions has upheld them.”
National Whistleblower Center has issued an Action Alert allowing whistleblower supporters to write the members of Congress urging them to protect and strengthen and protect the False Claims Act.
The claims asserted in this case are allegations only, and there has been no determination of liability.
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