September 12, 2019, 7:36 AM
The
trouble began for Ken and Judy Johnson – a pair of retirees from Austin, Texas
– at a Fort Lauderdale arts festival.
"There
was a couple of people in there saying 'come get your DNA tested,'" Judy
recalled. The company, Genexe Health, billed itself as a genetic testing
"one-stop shop." With a quick cheek swab, the Johnson's could learn
if they carried any genes that made a cancer diagnosis more likely.
"I've
had cancer. I had cancer six years ago. They indicated that they could give us
some results that if it's genetic, that it could be passed on to my children.
We've got four daughters," Judy said.
They
were also told the tests wouldn't cost them anything – Medicare would foot the
bill – and that they would get the results in four to six weeks. That was
almost a year ago. Since then, they've received nothing, but their Medicare
accounts were charged for a slew of genetic tests amounting to thousands of
dollars. Judy's account was billed more than $10,000 and Ken's more than
$8,300.
"I
mean, it hits me that we've been taken," Judy said.
Genexe
is part of an explosion of marketing companies hiring local recruiters to go
anywhere seniors hang out. The cancer test may be the hook, but the real goal
is to collect as many Medicare numbers as possible.
CBS News
found one woman who was convicted in 2017 of a half a million dollar securities
fraud pitching cancer tests in Youngstown, Ohio, for another company similar to
Genexe. She was still on probation at the time.
Ken and
Judy Johnson aren't alone. CBS News uncovered dozens more people who were
recruited by other marketers. One woman's Medicare account was billed $7,000
after she was swabbed at a Georgia home and garden show, a man in Texas was
charged more than $10,000 and an 85-year-old, mentally disabled woman was
swabbed by Genexe reps going door to door in North Carolina. That Medicare
bill? More than $21,000.
While
Genexe is headquartered in Denver, the company does its business through a web
of entities that hires recruits throughout the country. A woman who asked us
not to use her name was the office manager in Texas. Documents she shared with
us show in her less than three months on the job, recruiters for Genexe swabbed
more than 2,300 seniors.
"It's
just pure greed. Pure, pure greed. It had nothing to do with taking care of the
community," she said. "These swabs get lost. I'd find them in the
garbage."
She
told CBS News that at the office where she worked, swabs weren't stored in a
lab but in an old refrigerator. "This was in that office next to people's
hamburgers," she said. "People were waiting for these tests and would
never get them."
She
says recruiters were promised up to $200 a swab – money they rarely saw even as
Genexe management cashed in.
Ken and
Judy Johnson along with CBS News' Jim Axelrod went to Genexe Health's Denver
headquarters to see if someone there might know what happened to the couple's
test results. They were greeted by Genexe Health's general counsel, a man named
David Palladino.
Palladino
told them he didn't know where the couple's test results were and claimed to
have never seen a Genexe brochure that billed itself as a genetic testing
"one-stop shop." Palladino told the couple, "Listen, folks, I
did not charge you anything, so I think it's time for you to leave."
In all,
Medicare was billed $19,000 for the Johnson's tests.
"It
doesn't matter whether it was out of our pocket, Medicare's pocket, it's wrong.
It's a fraud," Ken said.
In a
statement, Genexe Health says it performed a very limited service on an arms-length
basis and had no involvement in either performing tests on samples or
submitting claims to the government.
We've
learned Genexe Health is under federal investigation and just last week, the
government warned Medicare beneficiaries about what they call the latest scam,
saying "only a doctor you know and trust should order and approve any
requests for genetic testing."
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