Genetic-Testing Scam Targets Seniors And Rips Off Medicare


The 86-year-old woman in rural Utah doesn’t usually answer solicitations from strangers, she said, however the young couple who knocked on her front door seemed so nice. In a short time, she had paid her Medicare and Social Security numbers – and ensured that they swab her cheek to gather her DNA.

She is among lots of older Americans who've been targeted inside a scam that uses DNA tests to defraud Medicare or steal personal information. Fraudsters find their victims across the nation through cold calls, door knocking, email, Facebook ads and Craigslist. They also troll low-income housing complexes, senior centers, health fairs and antique shops. Sometimes they offer ice cream, pizza or $100 gift cards. Some callers claim to work with Medicare, based on a fraud alert issued July 19 by the Federal Trade Commission.

The woman in Utah said she didn’t know the purpose of the DNA test she submitted to this month – “I’m too old to remember” – but the visit troubled her for several nights, she said.

“I’d stay awake thinking about it, saying, ‘You fool, you shouldn’t did that.'” (She spoke on the condition of anonymity for fear of being targeted by other scams.)

In interviews with Kaiser Health News, seniors round the country reported feeling betrayed, exposed and confused.

Capitalizing around the growing interest in dna testing – and fears of terminal illness – scammers are persuading seniors to consider two kinds of genetic screenings which are included in Medicare Part B, according to experts acquainted with the schemes. The tests try to detect their risk for cancer or medication side effects.

The scammers bill Medicare for that tests. The patients, who might never get any results, typically pay nothing. However they risk compromising personal information and family health background. And taxpayers foot the balance for tests that may be unnecessary or inappropriate.

Scammers can definitely cash in: Medicare pays an average of $6,000 to $9,000 of these tests, and often around $25,000, according to the Office of Inspector General at the Department of Health and Human Services.

DNA test scams appear to be ramping up: Complaints towards the inspector general fraud hotline have poured in at rates up to 50 per week, according to Sheila Davis, an OIG spokeswoman. That’s in contrast to one or two complaints a week at the same time this past year, she said.

The inspector general issued a fraud alert in June, urging seniors to refuse unsolicited requests for his or her Medicare numbers and take DNA tests only with the approval of the doctor they know and trust. By Medicare rules, DNA tests should be medically necessary and approved by a physician who is treating the individual.

In cases which have attended court, scammers were charged with breaking those rules by paying kickbacks to doctors who agreed to order DNA tests for patients without ever treating them. The front-line recruiters who solicit the tests might work directly for a lab, or as independent contractors who divide revenue having a laboratory in exchange for getting extra business.

Some solicitors attempt to scare seniors into cooperating, said Shimon Richmond, an assistant inspector general for investigations. They warn seniors they could be susceptible to heart attacks, stroke, cancer or even suicide if they don't take the DNA tests.

“That’s quite a egregious form of patient manipulation and emotional abuse,” Richmond said.

Richmond said the 2 tests active in the scams are: CGx, which tests for genetic predisposition to cancer, and PGx, a pharmacogenomic test for genetic mutations that affect how the body handles certain medications. They’re part of a new frontier of preventive genetic health.

In New Jersey, three everyone was delivered to federal prison in May for a scheme that used a purported nonprofit called Good Samaritans of America to influence hundreds of seniors to consider DNA tests. The co-conspirators raked in $100,000 in commissions from labs that ran the tests, based on the government.

“This can be a gold-rush position for folks. It’s resulting in a big response through the government,” said Assistant U.S. Attorney Bernard Cooney, a prosecutor in the case.

This month, a Florida doctor was charged in federal court for his role in an alleged fraud scheme to order DNA tests for patients in Oklahoma, Arizona, Tennessee and Mississippi. Patients were recruited through Facebook ads offering $100 gift certificates, according to court records. The doctor allegedly confessed he had been paid $5,000 per month to approve these tests, despite the fact that he never spoke to any of the patients involved.

Some labs charged with billing Medicare for unnecessary genetic tests – including Companion DX Reference Lab – decided to repay the federal government but declared bankruptcy before doing so, leaving taxpayers on the hook.

Meanwhile, older Americans are encountering sales pitches that leave them feeling deceived.

In Weslaco, Texas, Will Dickey, a 71-year-old retired police detective, submitted to a DNA test at a health fair in February.

“I've got a bunch of cancer in my family,” he recalled thinking, so “it’d help basically had an idea of what genes I'd within me.” 3 weeks later, he saw the same salesperson rounding up business at his RV park, where his wife and many neighbors got their cheeks swabbed. Dickey, who spent Ten years dealing with DNA tests in a police crime lab, said he was surprised at the cost: A lab in Mississippi charged Medicare $10,410 for his tests.

He didn’t get results until he requested them by telephone. The report, which listed results as “uncertain,” was “a bunch of gobbledygook which makes no sense to anybody who’s not in the medical field,” he explained. He reported the case to authorities as you possibly can fraud.

As in Dickey's case, scammers often access places that seniors trust by persuading gatekeepers to let them make presentations. Bev Beatty allowed an inherited testing company to run a booth in a senior health fair she organized in Oak Forest, Ill., this past year. At least 10 seniors took the tests. Afterward, she was irate to discover they were roped right into a scam. Test-takers told her they never received their DNA results, even though Medicare paid thousands of dollars.

“If somebody's likely to be fraudulent and bill Medicare, it kind of riles me up,” she said. “I would like to discover their whereabouts hanged.”

In Paducah, Ky., Donald McNeill, a 72-year-old Vietnam War veteran, was persuaded in an event at his senior center in December to submit a cheek swab for any DNA cancer screening. The company never sent results, he explained. But it billed $32,212.86 to his Medicare supplemental insurance insurance plan. He’s worried his private information will be misused.

“I’ve lost my identity to these people,” he said. “They got my DNA plus they got my information through this scam. I’m extremely upset.”

Others may face consequences for merely engaging with scammers. In Idaho, a lady in her late 60s said she taken care of immediately an online ad for free genetic testing and got a callback 20 seconds later. She received a cheek swab kit within the mail but, suspecting a scam, never sent it in. Now, she said, she finds her phone suddenly plagued by robocalls.

In California, 1 in 4 cases reported to the state’s Senior Medicare Patrol this year for potential fraud happen to be associated with genetic tests, according to Sandy Morales, statewide volunteer coordinator.

An employee of Entire home Solutions left a flyer at Sherry Swan's door. Pathway Labs handled about 20 tests submitted by Entire home Solutions, but cut ties with the company after receiving complaints about how seniors appeared to be solicited for that DNA tests.(Ana B. Ibarra/KHN)

Sherry Swan of Roseville, Calif., is among many who have filed complaints. She said she was home one Sunday afternoon at the begining of June whenever a man named Caleb knocked on her door, and said, “I’m here to complete your DNA testing.”

“What exactly are you talking about?” she recalled asking him. She said he failed to produce an ID when asked. “It had been just a scam from the minute he opened his mouth.”

Swan said she spent five minutes arguing with the man, then known as the police when he left.

“I’m aggressive. I work with homeless in the county,” said Swan, who's 64. But she said she worried about the more passive and trusting neighbors in her own senior living complex. She later learned that many have been persuaded to take the tests and divulge their loved ones medical histories.

A man named Freddy, who answered a number on a flyer that Caleb had left at Swan’s door, said he supervised Caleb included in a group from Whole Home Solutions. He explained the operation was aboveboard simply because they enrolled only eligible Medicare beneficiaries, which a teledoctor would talk to the person’s treating physician before the tests were sent in. The tests were handled by Pathway Labs in Colorado Springs, Colo.

Pathway Labs CEO Rene Perez confirmed his lab handled about 20 tests sent in by Whole Home Solutions. But he said he cut ties using the company on July 6 around the advice of his attorneys after receiving complaints about how exactly seniors were being solicited for the DNA tests. The lab worked with the outfit for about 45 days, Perez said.

Such experiences lead him to “unwilling to take on new business” from similar entities submitting DNA tests, Perez said.

“We strongly advocate and believe in the advantages of genetic preventative health,” he explained. “The main problem that we see right now is the fact that it's really picking up momentum on the national level. Unfortunately, when that occurs, you receive a number of different types of groups that essentially may see money involved.”

To seniors interested in these DNA tests, Richmond of the inspector general's office has this advice: “If someone calls you, or supplies you with an unsolicited request for your Medicare number or to convince you or scare you into taking a genetic test, either hang up the phone or say no.”

Seniors interested in the tests should call their primary care provider, he said: “Don’t give in to the manipulation or the scare tactics to obtain this healthcare test from someone you don’t know.”

If you suspect Medicare fraud, contact the OIG Hotline online or at 1-800-HHS-TIPS.