GenomeDx pays $2M to settle genetic test false claims allegations

Dive Brief:

GenomeDx Biosciences has agreed to pay $1.99 million to resolve allegations that it billed Medicare for medically-unnecessary prostate cancer tests.
Working from the testimony of whistleblowers, the U.S. government alleged GenomeDx knowingly filed claims for the use of the test in patients who lacked risk factors to justify its use.
GenomeDx settled the case without admitting liability but had to pay close to $2 million to do so.

Dive Insight:

GenomeDx’s Decipher test is designed to predict the probability that prostate cancer will metastasize after surgery and provide insights into the aggressiveness of the tumor. The predictions and insights are based on the level of expression of 22 RNA biomarkers involved in pathways linked to prostate cancer, making them distinct from Gleason scores and prostate-specific antigen (PSA) results.

The test has found favor with some payers and industry players, leading to coverage by organizations including Cigna and Medicare and a collaboration with Johnson & Johnson. However, the Medicare coverage GenomeDx received in 2015 limited the use of the test to a subset of patients.

After receiving reports from two GenomeDx employees, the Justice Department mounted a legal case against the company. In its case, the Justice Department argued that GenomeDx billed Medicare for the use of the test in patients who were ineligible for coverage under the government program.

The terms of the Medicare coverage are intended to limit use of Decipher to patients with certain risk factors. Specifically, patients must have either pathological stage T2 disease with a positive surgical margin, stage T3 disease or rising PSA levels after an initial nadir.

According to the Justice Department, GenomeDx knowingly submitted Medicare claims for the use of the test in patients without these risk factors from September 2015 to June 2017. That is a violation of the False Claims Act.

GenomeDx’s decision to settle the case means the validity of the Justice Department’s allegations will not be determined in a court of law. Rather, GenomeDx will pay $1.99 million, $350,000 of which will go to the whistleblowers, to put the case to bed without admitted to any wrongdoing.