Friday, September 2, 2022

Fact Checking the NYT: Conviction for "$77M Blood Testing Scheme"

On Friday September 2, 2022, up popped a NYT article on a "biotech executive conviction" for a "$77M scheme" involving false claims for COVID and other blood testing.  See the article here:

I went to the CMS database for 2020 claims paid by doctor or lab - here.  Searching for ARRAYIT, there were only two payable claims lines in CY2020, 86001 (allergy testing) and 86003 (IgE blood testing).  


Quoting the NYT, we read:  "Mr. Schena was convicted of a total of nine federal charges, including conspiracy to commit heath care, wire and health care fraud and three counts of securities fraud. He faces up to 20 years in prison for conspiracy to commit health care fraud and conspiracy to commit wire fraud, as well as 20 years for each count of securities fraud."

The article says that recruiters and doctors got kickbacks and bribes that involved running (or ordering) tests for 120 allergens, "regardless of medical necessity."   We also read that "submitted fraudulent claims to Medicare and private insurance for unnecessary allergy testing. The company billed more per patient to Medicare for blood-based allergy testing than any other laboratory in the United States, the Justice Department said. Some commercial insurers were billed more than $10,000 per test."

As with other Department of Justice Medicare cases, anybody can look up payment records for that lab or doctor, at least, until December 2020.  (2021 claims will be released next spring).   

In the 2020 database, ARRAYIT had only two paid claims lines, for 86001 and 86003.  There were a trivial 216 patients getting 216 tests for 86001.  However, there were 215 patients getting 13,392 tests ($68,433) for 86003, IgE testing.

Dollar Volume

At least for CY2020, and from these Medicare Part B records, that isn't much.  Total 2020 Part B payments for 86003 were about $11.7M, so the Arrayit $68,433 was only 0.6%.  38 entities were paid more than that for 86003, including about 10 over $200,000 and the highest, Labcorp, at $2M.   

Tests per Patient

Regarding tests per patient, at 62 paid tests per patient, Arrayit ranked 14th in the US.  Six entities were paid for between 75 and 99 tests per patient (not necessarily on one day).   (The data shows 84,000 patients and 2.2M services, or an average of 27 per patient).  

"The company billed more per patient to Medicare for blood-based allergy testing than any other laboratory in the United States, the Justice Department said."  It's possible the company billed more tests per patient to Medicare than any other entity- who knows, they could bill 500 tests per patient - but they were only PAID for about 60 tests per patient, and the total 2020 dollar volume in Medicare Part B was modest.   

(This contrasts to genetic test fraud reports from DOJ, where they name one or another lab as getting $25M in payments, and yes, you can look it up and the CMS data shows just that.)

The original Justice Department press release is here:

See some additional docket and indictment materials here.  It is noted that the jury decision was September 1, 2022, and the sentencing hearing is set for January 30, 2023.

"Superseding Indictment," 19pp


See coverage of this case at FierceBiotech here.