In Nebraska, the state insurance commissioner's office said it had heard of questionable DNA swabbing in several communities. It warned on March 27 that it had “received multiple reports of groups going to senior living communities, assisted living communities and senior centers offering to swab the cheeks of seniors for genetic material purportedly for DNA checks for cancer.”

Paying people to participate in medical tests and services would likely violate federal anti-kickback laws meant to stop fraud and abuse at government programs. It's not clear who is behind the reported activity in Kentucky and Nebraska, whether it's an organized group or individuals acting alone, and whether it is still ongoing.

The alleged scam follows an announcement by the Centers for Medicare and Medicaid last year that Medicare would cover genetic evaluation of cancer by FDA-approved tests. It also may capitalize on a growing awareness of popular consumer-marketed genetic tests where people can find out about their ancestry or learn some basic health information.

Medicare fraud

Fraud is a significant problem in government health-care programs like Medicare and Medicaid, which cover tens of millions of elderly and low-income people. Since 2007, a Medicare fraud task force has filed more than 1,600 cases against almost 3,500 defendants in Florida, New York, California and other states who are alleged to have fraudulently billed Medicare more than $13 billion, according to a 2018 report by the Office of Inspector General of the U.S. Health and Human Services Department.

The Centers for Medicare and Medicaid Services, which oversees the programs for the federal government, declined to comment.

In Louisville, DNA swabbers have falsely represented themselves as affiliated with a local Medicaid insurer, Passport Health Plan, setting up in low-income neighborhoods and giving people cash in exchange for DNA swabs, City Councilwoman Barbara Sexton Smith said in a telephone interview.

“They set up in the most impoverished, predominantly black area in our community,” said Sexton Smith. “They are preying on poor people.” Sexton Smith provided Bloomberg with copies of business cards and fliers promoting the DNA tests that she said were shared by people who were concerned.

She said she had been in contact with the state attorney general's office and law enforcement. It's not clear if people ever got a DNA test result back after giving samples, or what their information was or wasn't used for.

A business card Sexton Smith said was obtained from one of the testing locations shared listed a company named Freedom Medical, along with a website and phone number. The website didn't work when checked this week, and no one answered or returned calls to the Washington, D.C., area code number listed on the card.

Sexton Smith also shared a screenshot of a Facebook post urging Passport Health insurance clients to visit the intersection of Preston and Breckenridge streets for free cancer screenings and $20. Another post on Facebook advertised a similar service, mentioning the name of a company called Genexe Health in the post.

David Palladino, Genexe's general counsel, said in an email that it was aware of attempts to misuse the company's name, that it wasn't associated with any of the activities described, and that it doesn't operate in Louisville.

“Genexe categorically denies any/all involvement with any of the activities represented/referenced,” Palladino said. Palladino said the company takes multiple steps to combat fraud, and that the people described in the Louisville area “are completely unaffiliated with Genexe.”

Passport Health said the people allegedly collecting DNA and patient information weren't associated with the insurer. An April 1 news report by Louisville television station Wave3 shows people at a card table paying residents money in return for what appear to be cheek swabs, operating out of a white van.

“Passport Health Plan is in no way affiliated with this activity and we urge caution for anyone who may come into contact with them,” Ben Adkins, a spokesman for the insurer, said in an email to Bloomberg News.

Adkins said Passport had contacted local police and the Federal Bureau of Investigation. A representative for the local FBI office declined to comment.

In Nebraska, Department of Insurance Director Bruce Ramge said in a statement emailed by a spokeswoman that his agency had forwarded reports of questionable DNA swabbing to federal officials, “since Medicare dollars may have been spent for payment of the swabbing.” In response to a public records request, the state declined to provide records of reports, saying it “will not provide information or documents that are part of investigations.''

Ramge said in the emailed statement that his department was also concerned about people being improperly billed for the tests.

“This may be a scam and should be avoided,” the department said in the March warning notice.

Read more: 

• Hospital chain to pay $65M to settle Medicare fraud claims
• Insurance companies and the Fourth Industrial Revolution: Privacy and security risks
• Patients less excited about DNA tests if insurers see results

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