Medicare Genetic Testing Fraud: Hospital Billing

Medicare genetic testing fraud has drawn intensifying federal scrutiny, and two recent Louisiana enforcement actions illustrate why hospital billing insiders may want to pay close attention. In the Eastern District of Louisiana, a defendant identified as Spivey was sentenced for conspiracy to commit health care fraud after allegedly submitting $174 million in fraudulent claims to Medicare for medically unnecessary cancer genetic testing and cardiovascular genetic testing. A closely related case in the same district resulted in nurse practitioner Scharmaine Lawson Baker being sentenced to 87 months imprisonment for a scheme involving over $12 million in fraudulent Medicare claims for medically unnecessary cancer genetic tests. Together, these cases signal a coordinated federal focus on hospital billing fraud involving Medicare unnecessary tests. Every False Claims Act matter is different; results depend on the specific facts of each case, and no similar outcome is implied.

This article explains how these schemes worked, why federal enforcement is escalating, and what patterns billing staff, compliance officers, clinical employees, and laboratory representatives might recognize as potential red flags under the False Claims Act.

Two Louisiana Cases Illustrate How Medicare Genetic Testing Fraud Works

Two Eastern District of Louisiana prosecutions — the Spivey matter involving $174 million in alleged fraudulent Medicare claims and the Baker matter involving over $12 million — together demonstrate the range of conduct that federal prosecutors are targeting in Medicare genetic testing fraud enforcement. Both cases involve medically unnecessary tests billed to Medicare, and both were highlighted in the July 30, 2026 joint announcement by Louisiana’s three U.S. Attorneys.

The Spivey Case: $174 Million in Fraudulent Claims

Spivey was sentenced for conspiracy to commit health care fraud after conspiring with co-defendant Jamie McNamara to fraudulently submit $174 million in fraudulent claims to Medicare for medically unnecessary cancer genetic testing and cardiovascular genetic testing — a scale that illustrates how quickly fraudulent billing for genetic panels can accumulate. According to the DOJ National Fraud Enforcement Division announcement, “the genetic tests Medicare patients were lured into did not provide them with any answers on their predisposition to life threatening illnesses and cost taxpayers millions of dollars.” The case was handled by the Eastern District of Louisiana under U.S. Attorney David Courcelle.

The language in the DOJ’s announcement — that patients were “lured” into tests — points to an active patient recruitment component. Insiders working in marketing, patient outreach, or billing at laboratories or clinical facilities may be positioned to observe similar recruitment activity directed at Medicare beneficiaries.

The Baker Case: Kickbacks, Male Patients, and Cancer Tests

On June 17, 2026, nurse practitioner Scharmaine Lawson Baker was sentenced to 87 months imprisonment and ordered to pay $1,508,868 in restitution for her role in a health care fraud scheme resulting in over $12 million in fraudulent Medicare claims for medically unnecessary cancer genetic tests. Baker received tens of thousands of dollars in illegal kickbacks, and trial evidence showed that she ordered ovarian and cervical cancer tests for male patients — a concrete example of clinically baseless ordering that billing or clinical staff might observe in practice. The case was prosecuted by DOJ Gulf Coast Health Care Fraud Strike Force Trial Attorneys Samantha E. Usher, Gary A. Crosby II, and Kelly Z. Walters, and by Assistant U.S. Attorney Nicholas D. Moses. Every False Claims Act matter is different; results depend on the specific facts of each case, and no similar outcome is implied.

Why the DOJ Is Escalating Medicare Billing Fraud Enforcement Now

The DOJ’s enforcement posture on Medicare billing fraud has shifted significantly in 2026, with the creation of a dedicated national division and a coordinated multi-state sweep that placed these Louisiana genetic testing cases within a broader regional enforcement pattern. As U.S. Attorney David Courcelle stated in the joint announcement, these cases “emphasize the combined missions of the DOJ and the U.S. Attorney’s Offices for the Eastern, Middle and Western Districts of Louisiana to safeguard the nation’s coffers from fraudulent schemes.”

The National Fraud Enforcement Division

On April 7, 2026, the Department of Justice announced the creation of the National Fraud Enforcement Division, whose core mission is to investigate and prosecute those who steal or fraudulently misuse taxpayer dollars. The Louisiana genetic testing cases fall within the enforcement priorities the Division has publicly announced, and the Division’s July 30, 2026 announcement described the Spivey matter as among the cases exemplifying its work. The creation of a dedicated division signals a better-resourced federal enforcement infrastructure focused on exactly the kind of Medicare billing fraud these cases represent.

The Southeast Enforcement Sweep

The July 30, 2026 announcement from the National Fraud Enforcement Division encompassed 17 cases spanning seven states — Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, and South Carolina — involving over $350 million in intended losses. The Louisiana genetic testing cases are part of this broader regional pattern, not isolated prosecutions. The Division also announced new federal-state cooperation agreements and data-sharing arrangements with multiple state agencies, which may expand the government’s ability to detect billing anomalies across state lines.

Four Red Flags That May Signal Medicare Genetic Testing Fraud

For those working inside hospitals, physician practices, diagnostic laboratories, or genetic testing companies, the Baker and Spivey cases offer a practical framework for recognizing conduct that federal prosecutors have treated as fraudulent. Billing staff, compliance officers, clinical employees, and laboratory sales representatives may be positioned to observe one or more of the following patterns.

Orders With No Clinical Basis

The Baker case produced trial evidence that she ordered ovarian and cervical cancer tests for male patients — tests whose clinical inappropriateness was apparent from basic patient demographics. Billing or clinical staff who observe ordering patterns that do not align with patient diagnoses or demographics may be observing conduct similar to what federal prosecutors pursued in the Baker matter. High volumes of identical genetic panels ordered across a patient population with no apparent clinical rationale could reflect a similar pattern.

Kickback Arrangements Tied to Test Referrals

Baker received tens of thousands of dollars in illegal kickbacks in connection with her ordering of medically unnecessary cancer genetic tests. Employees who are aware of financial arrangements between ordering providers and testing companies — such as payments, commissions, or other benefits tied to referral volume — may have knowledge relevant to a potential False Claims Act action. The Baker prosecution illustrates that kickback arrangements connected to genetic test referrals are an active area of federal enforcement.

Patient Recruitment or “Luring” Schemes

The DOJ’s description of the Spivey case states that Medicare patients were “lured” into tests that did not provide them with answers on their predisposition to life-threatening illnesses. Marketing staff, patient outreach coordinators, or billing personnel at laboratories may observe recruitment campaigns directed at Medicare beneficiaries that appear designed to generate test orders rather than to serve a clinical need. The Spivey matter suggests that patient recruitment activity connected to genetic testing is a pattern federal prosecutors have scrutinized.

High-Volume Medicare Billing for Genetic or Specialty Tests

The scale of the Spivey case — $174 million in submitted claims — demonstrates that fraudulent billing for genetic testing panels can reach extraordinary volumes before prosecution. Insiders who observe unusually high volumes of Medicare billing for genetic or specialty tests, particularly where the ordering patterns do not appear to reflect individualized clinical judgment, may be observing conduct that draws the kind of federal scrutiny reflected in the DOJ’s Southeast enforcement sweep. Every False Claims Act matter is different; results depend on the specific facts of each case, and no similar outcome is implied.

How the False Claims Act May Protect and Reward Whistleblowers

Under 31 U.S.C. § 3730(b), a person may bring a civil action for a violation of section 3729 for the person and for the United States Government. A relator who brings such an action — commonly called a whistleblower or qui tam plaintiff — may be entitled to a share of any government recovery. Under 31 U.S.C. § 3730(d)(1), if the government proceeds with the action, the relator shall receive at least 15 percent but not more than 25 percent of the proceeds of the action or settlement, depending on the extent to which the person substantially contributed to the prosecution of the action, subject to the proviso in that subsection. Under 31 U.S.C. § 3730(d)(2), if the government does not proceed with the action, the relator shall receive an amount that the court decides is reasonable and shall be not less than 25 percent and not more than 30 percent of the proceeds. The False Claims Act also provides retaliation protections for employees who report fraud.

No outcome in any particular case can be assured, and whether a given set of facts supports a viable qui tam action depends on circumstances that vary from case to case. What the Baker and Spivey matters do illustrate is that the DOJ is actively investigating and prosecuting Medicare genetic testing fraud, and that insiders with firsthand knowledge of similar conduct may have legal options worth exploring with counsel.

If practices like these look familiar from your own workplace, you can discuss what you have seen with a Price Armstrong attorney confidentially and at no cost. Call (888) 670-9542 or use the secure evaluation form below.

Frequently Asked Questions

What makes genetic testing billed to Medicare potentially fraudulent?

Genetic testing billed to Medicare may be fraudulent when the tests are medically unnecessary — meaning they are ordered without a legitimate clinical basis for the individual patient. The Baker case involved trial evidence that ovarian and cervical cancer tests were ordered for male patients, and the Spivey matter involved $174 million in alleged claims for tests that, according to the DOJ’s announcement, “did not provide them with any answers on their predisposition to life threatening illnesses.”

Who can file a False Claims Act qui tam lawsuit over Medicare billing fraud?

Under 31 U.S.C. § 3730(b), a person may bring a civil action for a violation of section 3729 for the person and for the United States Government. In practice, qui tam relators are often insiders — billing staff, compliance officers, clinical employees, or laboratory representatives — who have firsthand knowledge of fraudulent Medicare billing that is not already publicly known. The statute’s first-to-file provisions and other requirements make early consultation with counsel important.

What retaliation protections does the False Claims Act provide?

The False Claims Act provides retaliation protections for employees who report fraud. Under 31 U.S.C. § 3730(h), any employee, contractor, or agent who is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done in furtherance of a False Claims Act action or in efforts to stop a violation shall be entitled to all relief necessary to make that employee, contractor, or agent whole. Anyone considering reporting Medicare billing fraud should discuss these protections with an attorney before taking action.