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US DOJ Charges Lab Owner in Alleged $127M Genetic Testing Kickback Scheme

NEW YORK – The owner of two testing laboratories in the Pittsburgh area was charged in an alleged $127 million kickback scheme for cancer genomic and pharmacogenetic testing, the US Attorney’s Office for the Western District of Pennsylvania announced Tuesday.

Ravitej Reddy is accused of participating in three separate schemes involving the two labs he owned, Personalized Genomics, in Pittsburgh, and Med Health Services Management, in Monroeville, Pennsylvania. According to the attorney’s office, Reddy acquired thousands of testing samples and corresponding prescriptions from Medicare beneficiaries throughout the US with the help of business consultants, marketers, and the operator of a Florida telemedicine company.

Contract physicians sent the samples to Personalized Genomics and Med Health Services even though the doctors hadn’t conducted adequate visits, weren’t treating the patients for cancer, didn’t use the test results in treatment of the patients, and “generally were not qualified to understand and interpret the test results,” the attorney’s office said. 

Reddy then allegedly submitted claims with his labs as the billing laboratories, despite the fact that his labs didn’t have properly validated equipment to conduct cancer genomic testing. His labs are located in a high-reimbursement area, but the samples were sent to reference labs outside the coverage area for testing.

Reddy is accused of submitting claims for testing that regularly exceeded $12,000 per Medicare beneficiary and billing Medicare more than $127 million for the testing with reimbursements of approximately $60 million.