Ishaan Shah Pittsburgh Indian Financial Specialist

Pittsburgh Indian Genetics Lab Owner Ravitej Reddy Charged with Paying Kickbacks

November 26, 2019 - Pittsburgh Indian lab owner Ravitej Reddy (52) was charged today in federal court with paying kickbacks in connection with almost $130 Million in Medicare claims for genetic testing.

Ravitej Reddy owned two testing laboratories Personalized Genetics, LLC, d/b/a Personalized Genomics (PGL) and Med Health Services Management, LP (MHS) in Pittsburgh and Monroeville, PA respectively.

Ravitej Reddy and his partners in crime were allegedly responsible for more than $125 million in genetic testing claims submitted to Medicare as the result of a sophisticated, nationwide kickback scheme.

According to the case information:
Beginning as early as May 2018, and continuing through approximately April 12, 2019, the Information alleges that the defendant participated in three separate conspiracies related to Medicare billing for two types of genetic testing: cancer genomic testing (CGx) and pharmacogenetic testing (PGx). CGx testing used DNA sequencing to detect mutations in genes that could indicate a higher risk of developing certain types of cancers in the future. CGx testing, however, was not a method of diagnosing whether an individual presently had cancer. PGx testing detected specific genetic variations in genes that impacted the metabolism of certain medications. In other words, PGx testing helped determine, among other things, whether certain medications would be effective if used by a particular patient.

...the defendant and a group of co-conspirators comprising business consultants, marketers, and the operator of a telemedicine entity, among others, acquired thousands of testing samples from Medicare beneficiaries located throughout the United States, as well as the corresponding prescriptions that PGL and MHS needed to bill Medicare for CGx and PGx testing. For their part, the marketers used targeted campaigns to induce beneficiaries to submit CGx and PGx specimens by means of cheek swabs sent to their homes or provided to them at purported "health fairs" held throughout the United States. Marketers, in turn, were paid percentage-based kickbacks depending upon the Medicare reimbursements for beneficiaries whose samples they had obtained and submitted to PGL or MHS.

Likewise, the operator of a Florida-based telemedicine entity allegedly was paid kickbacks in connection with obtaining CGx and PGx prescriptions from physicians who were contracted by his company to review the beneficiaries’ personal and familial medical histories. As alleged, contract physicians authorized testing for greater than 95% of beneficiaries despite the fact that the doctors did not conduct a proper telemedicine visit, were not treating the Medicare beneficiaries for cancer or symptoms of cancer, did not use the test results in the treatment of the beneficiaries, and generally were not qualified to understand and interpret the test results.

....the defendant and his co-conspirators took advantage of PGL’s and MHS’s physical locations within the Medicare coverage area that offered the highest reimbursement rates in the United States. As alleged, the co-conspirators used PGL and MHS as the billing laboratory despite the fact that the labs did not possess properly validated equipment to conduct any CGx testing on-site and, as such, were forced to send samples for proper testing by a so-called reference laboratory that was located outside of the lucrative coverage area.

The three charged conspiracies involve similar conduct related to the acquisition of CGx and PGx specimens. The first conspiracy, however, allegedly involved billings only through PGL, while the second and third conspiracies involved billings through MHS. According to the Information, the defendant engaged in the second and third conspiracies with some, but not all, of the same co-conspirators as the first conspiracy, and he pursued these alleged side deals, in part, as a means to increase his share of the profits relative to the PGL-based conspiracy. Finally, the Information charges one substantive kickback count, alleging that the defendant paid percentage-based kickbacks to another unrelated marketing entity in connection with the acquisition of PGx and other testing samples between October 2017 and April 2019.

...the defendant caused PGL and MHS to submit Medicare claims for CGx and PGx testing that regularly exceeded $12,000 per beneficiary. In total, between May 2018 and April 12, 2019, the defendant’s laboratories billed Medicare more than $127 million for CGx and PGx testing, with reimbursements of approximately $60 million.
Criminal Charges Against Ravitej Reddy
The charges against Monroeville, PA resident Ravitej Reddy include:
Potential Penalty
For each of the three conspiracy counts, Pittsburgh Indian genetics lab owner Ravitej Reddy faces a maximum sentence of five years in prison, a fine of $250,000, or both.

And the substantive kickback charge against Ravitej Reddy carries a maximum sentence of ten years in prison, a fine of $250,000, or both.

The above mentioned maximum potential sentences are prescribed by Federal Guidelines and provided for informational purposes only.

The actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant Ravitej Reddy.