Monroeville man charged in $127 million scheme pleads guilty
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A Monroeville man pleaded guilty to federal charges related to a $127 million kickback scheme against Medicare patients, the U.S. Attorney’s Office said Friday.
Ravitej Reddy, 52, conspired with multiple companies to pay kickbacks for lab tests done at his Monroeville and Pittsburgh genetic testing facilities.
He pleaded guilty to three counts of conspiracy and one substantive count related to the payment and receipt of unlawful kickbacks. Prosecutors said he could face up to 25 years in prison and up to $500,000 in fines.
Reddy also agreed to pay $77.3 million in restitution to the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services, prosecutors said.
The scheme involved billing Medicare patients for two kinds of genetic testing at his labs, from May 2018 to April 2019.
One test, called cancer genomic testing, or CGx, uses DNA sequencing to detect mutations that could indicate cancer risk. The other, pharmacogenetic testing, or PGx, detects effectiveness of medications.
Reddy and six conspirators allegedly collected DNA samples from Medicare beneficiaries by having marketers reach out to them. The marketers would ask beneficiaries to submit cheek swabs using kits sent to their homes. They also brought kits to health fairs across the country.
Marketers were then paid kickbacks if samples were sent to Reddy’s labs.
Reddy also paid kickbacks to a telemedicine company that he used to get fraudulent prescriptions from doctors hired to review patients’ medical histories. Those doctors would then authorize further testing without the proper telemedicine visits.
Prosecutors said Reddy’s labs received $60 million in reimbursements from more than $127 million in bills from Medicare.