Genetic cancer risk scam targeting seniors may disqualify them from legitimate tests

New details in massive genetic testing scam

A CBS News investigation uncovered a massive Medicare scam where recruiters entice seniors to submit a DNA sample for a "free" genetic cancer risk test. Many never receive the results from these companies but their Medicare accounts are billed for thousands of dollars.

In part two of this investigation, CBS News' Jim Axelrod looks at the doctors and laboratories these recruiters are partnering with to bill Medicare. According to government estimates, they are potentially siphoning hundreds of millions of taxpayer dollars from the program.

CBS News went undercover to find out how the process works. It starts with a recruiter who convinces seniors to hand over a saliva sample and their Medicare cards. One recruiter said she makes $200 per senior and that others are pulling in more than $10,000 a month. She also said the bill to Medicare for the testing can cost anywhere from $2,500 to $10,000.

After a recruiter has gotten a saliva sample and Medicare card from someone, Medicare pays the lab processing 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.

"We are essentially the conduits that are basically flowing people into the labs," the recruiter we spoke with said. 

Bob Thomas is a former federal prosecutor who now represents whistleblowers in ongoing healthcare fraud cases. He says scammers are luring in labs with a promise to triple their revenue.

"Once they've secured the saliva sample and the Medicare card, they shop it around to labs," he said. "The biggest problem here is kickbacks, because the sales force is going out there to the lab saying 'Hey, I'll get you more business, but you gotta cut me in on it.' That's not the way medicine should work."

"Free" genetic testing scam exploits seniors' cancer fears and may be costing taxpayers millions

What's even worse, according to Thomas, is that some of these people may not qualify for legitimate DNA tests down the road. 

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

Our investigation found labs across the country billing Medicare tens of thousands of dollars for unnecessary genetic tests.

Ken and Judy Johnson were at an art festival in Fort Lauderdale last October when they were stopped by recruiters representing a company called Genexe Health promoting the cancer tests. Six weeks later, $19,000 worth of charges were billed to their Medicare accounts by a lab run out of a former church in Louisiana and yet, to this day, they've received no test results.

Daniel Canchola is the doctor who signed Ken and Judy's test results. But they've never seen, spoken to, or heard of him. Canchola declined to answer any questions about the test orders he signed, so we met him in the parking garage of his Dallas office where he told us we'd need to speak to his representative and refused to answer any questions about whether he knew who Ken and Judy Johnson were. 

We followed up with Canchola, who never did give us the name of his representative. In a statement, the lab that billed the Johnsons' Medicare account told us it is no longer accepting tests request from Dr. Canchola. We also repeatedly asked officials from the government department that oversees Medicare to sit down with us, but they declined.