The scams capitalize on agrowing awareness of popular consumer-marketed genetic tests wherepeople can find out about their ancestry or learn some basic healthinformation.

Authorities in several states are warning about an alleged scamin which people visit senior-living communities and low-incomeneighborhoods, offering to perform DNA tests and collecting information frompeople in government health programs.

The alleged DNA-testing scams appear to be a new twist on an oldtactic, in which people are tricked into giving away personalinformation or participating in medical services they don't need.Perpetrators of such schemes can bill the government for unneeded medical testsand procedures, or use the information they collect — such asMedicare and Medicaid identification data — to commit identitytheft and fraud.

Related: The feds are cracking down on health care fraud.Here's what they're looking for.

In Kentucky, Attorney General Andy Beshear's office said thismonth that Louisville residents had reported people operating outof a van and offering to pay Medicaid recipients $20 for DNA swabsand their health insurance information.

In Nebraska, the state insurance commissioner's office said ithad heard of questionable DNA swabbing in several communities. Itwarned on March 27 that it had “received multiple reports of groupsgoing to senior living communities, assisted living communities andsenior centers offering to swab the cheeks of seniors for geneticmaterial purportedly for DNA checks for cancer.”

Paying people to participate in medical tests and services wouldlikely violate federal anti-kickback laws meant to stop fraud andabuse at government programs. It's not clear who is behind thereported activity in Kentucky and Nebraska, whether it's anorganized group or individuals acting alone, and whether it isstill ongoing.

The alleged scam follows an announcement by the Centers forMedicare and Medicaid last year that Medicare would cover geneticevaluation of cancer by FDA-approved tests. It also may capitalizeon a growing awareness of popular consumer-marketed genetic testswhere people can find out about their ancestry or learn some basichealth information.

Medicare fraud

Fraud is a significant problem in government health-careprograms like Medicare and Medicaid, which cover tens of millionsof elderly and low-income people. Since 2007, a Medicare fraud taskforce has filed more than 1,600 cases against almost 3,500defendants in Florida, New York, California and other states whoare alleged to have fraudulently billed Medicare more than $13billion, according to a 2018 report by the Office of InspectorGeneral of the U.S. Health and Human Services Department.

The Centers for Medicare and Medicaid Services, which overseesthe programs for the federal government, declined to comment.

In Louisville, DNA swabbers have falsely represented themselvesas affiliated with a local Medicaid insurer, Passport Health Plan,setting up in low-income neighborhoods and giving people cash inexchange for DNA swabs, City Councilwoman Barbara Sexton Smith saidin a telephone interview.

“They set up in the most impoverished, predominantly black areain our community,” said Sexton Smith. “They are preying on poorpeople.” Sexton Smith provided Bloomberg with copies of businesscards and fliers promoting the DNA tests that she said were sharedby people who were concerned.

She said she had been in contact with the state attorneygeneral's office and law enforcement. It's not clear if people evergot a DNA test result back after giving samples, or what theirinformation was or wasn't used for.

A business card Sexton Smith said was obtained from one of thetesting locations shared listed a company named Freedom Medical,along with a website and phone number. The website didn't work whenchecked this week, and no one answered or returned calls to theWashington, D.C., area code number listed on the card.

Sexton Smith also shared a screenshot of a Facebook post urgingPassport Health insurance clients to visit the intersection ofPreston and Breckenridge streets for free cancer screenings and$20. Another post on Facebook advertised a similar service,mentioning the name of a company called Genexe Health in thepost.

David Palladino, Genexe's general counsel, said in an email thatit was aware of attempts to misuse the company's name, that itwasn't associated with any of the activities described, and that itdoesn't operate in Louisville.

“Genexe categorically denies any/all involvement with any of theactivities represented/referenced,” Palladino said. Palladino saidthe company takes multiple steps to combat fraud, and that thepeople described in the Louisville area “are completelyunaffiliated with Genexe.”

Passport Health said the people allegedly collecting DNA andpatient information weren't associated with the insurer. An April 1news report by Louisville television station Wave3 shows people ata card table paying residents money in return for what appear to becheek swabs, operating out of a white van.

“Passport Health Plan is in no way affiliated with this activityand we urge caution for anyone who may come into contact withthem,” Ben Adkins, a spokesman for the insurer, said in an email toBloomberg News.

Adkins said Passport had contacted local police and the FederalBureau of Investigation. A representative for the local FBI officedeclined to comment.

In Nebraska, Department of Insurance Director Bruce Ramge saidin a statement emailed by a spokeswoman that his agency hadforwarded reports of questionable DNA swabbing to federalofficials, “since Medicare dollars may have been spent for paymentof the swabbing.” In response to a public records request, thestate declined to provide records of reports, saying it “will notprovide information or documents that are part ofinvestigations.''

Ramge said in the emailed statement that his department was alsoconcerned about people being improperly billed for the tests.

“This may be a scam and should be avoided,” the department saidin the March warning notice.

Read more: 

• Hospital chain to pay $65M to settle Medicare fraudclaims
• Insurance companies and the Fourth IndustrialRevolution: Privacy and security risks
• Patients less excited about DNA tests if insurerssee results

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