Genetic testing company agrees to $42.6M settlement and 25-year ban in Medicare fraud case

Medical justice
Department of Health and Human Services officials say genetic testing scams are becoming all too common. (Getty/yavdat)

A New Orleans-based genetic testing company and its three principals will pay $42.6 million to resolve charges that they paid kickbacks in exchange for referrals for unnecessary pharmacogenetic testing billed to Medicare.

UTC Laboratories, also known as RenaissanceRX or RenRX, agreed to a 25-year ban from participating in any federal healthcare program, the Justice Department said in a press release.

UTC Laboratories has agreed to pay $41.6 million, and its three principals, Tarun Jolly M.D., Patrick Ridgeway, and Barry Griffith, have agreed to pay $1 million as part of the settlement. The Justice Department said there was no admission of liability.

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RELATED: DOJ arrests 35 in $2.1B Medicare scam targeting seniors for fraudulent genetic testing

The settlement announced by the Justice Department resolves allegations in six whistleblower lawsuits pending in the United States District Court for the Eastern District of Louisiana: The lawsuits were filed under the qui tam provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The whistleblower shares to be awarded have not yet been determined.

“The payment of kickbacks in exchange for medical referrals undermines the integrity of our healthcare system. Today’s settlement reflects the Department of Justice’s commitment to ensuring that taxpayer monies are well spent and not wasted on unnecessary medical testing,” Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division said in a statement.

The Justice Department accused the company and its three principals of paying physicians from 2013 to 2017 to induce them to order pharmacogenetic tests, purportedly in return for their participation in a clinical trial known as the Diagnosing Adverse Drug Reactions Registry (DART). The government also accused UTC and its principals of paying entities and individuals as part of the scheme and furnished pharmacogenetic tests that were not medically necessary and billed the Medicare program.

Reuters reported that the company ceased operations in 2017 because of whistleblower allegations and an ensuing probe, citing a spokeswoman for the UTC principals said.

RELATED: Los Angeles pharmacy owners found guilty in $35M fraud scheme

“After five years of legal defense, the principals ultimately agreed to a settlement, having simply run out of energy to continue prolonged legal proceedings,” the spokeswoman said in a statement, according to Reuters.

Special Agent in Charge CJ Porter of the Department of Health and Human Services Office of Inspector General (HHS-OIG) said genetic testing scams are becoming all too common. OIG issued a genetic testing fraud alert to inform the public about these schemes. 

The investigation was conducted by the U.S. Attorney’s Office for the Eastern District of Louisiana and the Department of Justice’s Civil Division, in conjunction with the HHS-OIG and the FBI.

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