Dozens charged after CBS News exposes Medicare scam targeting seniors

Federal officials on Friday announced charges against 35 people linked to a massive Medicare scam. It comes two weeks after a CBS News investigation revealed how recruiters entice seniors to submit a DNA sample for a "free" genetic cancer risk test.

CBS News correspondent Jim Axelrod reported that many victims of the scam never receive their results and their Medicare accounts are billed anyway. The individuals charged are accused of submitting more than $2.1 billion in false Medicare claims.

Among those charged is Dr. Daniel Canchola. Axelrod confronted Canchola in a parking lot about signing the test results of a couple whose Medicare accounts were hit with $19,000 worth of charges.

According to the Justice Department press release, Canchola is "charged for his alleged referral of Medicare beneficiaries for medically unnecessary 'cancer screening,' or 'CGx,' genetic tests." He was charged with submitting $69 million in fraudulent claims. 

"Canchola received illegal kickbacks and bribes" for the orders he signed, "and he did so without examining or speaking to patients," the Justice Department said.

One pair of retirees, Ken and Judy Johnson, learned about these tests at a Fort Lauderdale arts festival. With a cheek swab, they could learn if they carried any genes that made a cancer diagnosis more likely. 

"I've had cancer. I had cancer six years ago. They indicated that they could give us some results that if it's genetic, that it could be passed on to my children. We've got four daughters," Judy said. 

In total, Medicare was billed $19,000 for their tests and they never received their results. CBS News uncovered dozens of others who were recruited by other marketers. In one case, an 85-year-old mentally disabled woman was swabbed by reps going door to door in North Carolina. That Medicare bill totaled more than $21,000.  

Medicare fraud using DNA test targets seniors

Recruiters convinced seniors to hand over a saliva sample and their Medicare cards. One recruiter said she makes $200 per senior and others are pulling in thousands a month. She said the bill to Medicare can range from $2,500 to $10,000.

After a recruiter has gotten a saliva sample and Medicare card, Medicare pays the lab to process the swab, as long as a doctor has signed a test order. So recruiters partner with willing labs and doctors who certify the tests are medically necessary.

Former prosecutor Bob Thomas told CBS News some people may not qualify for legitimate DNA tests later on.

"It's tragic in some ways because these people aren't going to get two bites at this apple," he said. 

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