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Nursing home operator to pay $1 million over alleged false genetic testing claims

Feds say Prestige Healthcare failed to ensure that physician orders were obtained for genetic tests prior to being conducted.

Jeff Lagasse, Associate Editor

Prestige Healthcare has agreed to pay the federal government nearly $1 million to resolve allegations that it violated the False Claims Act in a scheme to falsely bill Medicare for unnecessary genetic testing, according to the U.S. Department of Justice.

Based in Louisville, Kentucky, Prestige is an owner and operator of nursing homes in several states. The four facilities in question are in Wisconsin in Rhinelander, Oshkosh, Milwaukee and Wisconsin Rapids.

Nursing home operators such as Prestige place orders with clinical laboratories for medically necessary diagnostic laboratory tests for their residents. In order to be considered medically necessary and thus reimbursable under Medicare, the laboratory test must be ordered by the physician treating the resident.

The United States alleged that in 2014 Prestige was approached by an entity known as Genomix, which claimed that it could perform genetic testing on Prestige's Medicare residents in order to ascertain whether those patients were properly metabolizing their medications. The federal government alleged that in 2014 and 2015, Prestige provided Genomix with insurance and personal medical information, as well as access to patients in nursing homes in several states, including Wisconsin, for purposes of conducting the testing. Genomix conducted the testing by taking cheek swabs of each Prestige patient and then sending the cheek swab to a laboratory for analysis.

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The allegations charge Prestige with failing to ensure that physician orders were obtained for the genetic testing prior to its being conducted, and that Prestige physicians were not aware of, and did not agree with, the medical necessity of the testing.

It is also alleged that Prestige failed to ensure that its patients -- or, in some cases, their family members responsible for their medical decisions -- were appropriately informed of the testing prior to its being conducted, and provided with the opportunity to decline the testing.

The DOJ said the lack of physician orders and patient consent was discovered during a survey conducted by state regulators in late 2015.

The settlement resolves Prestige's civil liability, but does not resolve the liability of any other entities, including Genomix, which is based in southern California.

Twitter: @JELagasse

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