Coronavirus Fraud Takes Many Forms as Federal and Local Officials Continue to Pursue Widespread Cases of Clinical Laboratory Testing Scams

Since the pandemic began, federal investigators are specifically looking for patterns of fraud in Medicare claims data for COVID-19 clinical laboratory testing

Last month, the federal Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced it had been investigating trends in Medicare claims data that could indicate patterns of fraud in the billing for COVID-19 clinical laboratory tests, Modern Healthcare reported.

Stretching back to at least March, fraudulent actors offering fake SARS-CoV-2 tests have preyed on vulnerable Americans in a wide variety of ways during the public health emergency, according to published reports. Some scam operators have gone into nursing homes and long-term care facilities to collect cash from unsuspecting elders in exchange for swab collections and phony testing, the New York Times reported.

Since the declaration of the public health emergency in the US, the federal Centers for Medicare and Medicaid Services (CMS) no longer requires a lab test requisition signed by a treating physician or other provider for COVID-19 testing. “The strong demand for and limited supply of SARS-CoV-2 tests, along with the move by CMS to relax rules for certain test orders during the pandemic, makes the situation a potentially ripe one for fraud,” Modern Healthcare stated.

Plus, a lack of clarity about the medical necessity of COVID-19 tests could raise the liability risk for law-abiding clinical laboratories. All of these factors make COVID-19 testing fraud a potential bombshell for clinical laboratories conducting coronavirus testing that may get caught up in federal investigations.

Feds Step Up Enforcement

Shortly after the pandemic arrived in the US, the FBI, the Better Business Bureau (BBB), the FDA, the federal Department of Health and Human Services (HHS), and other federal and local authorities have frequently warned doctors, hospitals, and healthcare consumers about the potential for fraud by unscrupulous companies purporting to offer legitimate clinical laboratory testing for COVID-19. A June 26 FBI press release stated, “Scammers are marketing fraudulent and/or unapproved COVID-19 antibody tests, potentially providing false results.”

Some of the fraudsters behind these scams have operated online and through social media and email. While others have conducted these scams in person or over the phone, noted the press release.

And yet, despite the warnings, the scams and news articles about them have continued to spread throughout the COVID-19 pandemic.

Various Forms of Fraud and Their Consequences

In many of these scams, fraudsters seek to collect consumers’ personal information, including names, dates of birth, and Social Security numbers, as well as other forms of personal health information, such as Medicare or private health insurance data, the FBI reported. Scammers can use that information in medical insurance fraud schemes or to commit identity theft, the agency added.

Additionally, any fake or inaccurate COVID-19 tests or assays that the FDA has not allowed for use could provide doctors with false results, potentially creating a dangerous situation for patients.

The New York Times (NYT) recently reported that the FBI had issued a warning “about scammers who advertise fraudulent COVID-19 antibody tests as a way to obtain personal information that can be used for identity theft or medical insurance fraud.”

Three days after the FBI issued its warning about the COVID-19 antibody testing scam, the BBB added an alert to its website: “BBB Scam Alert: Want a COVID-19 test? There’s a scam for that.” BBB also provided advice to consumers about how to avoid testing scams.

On June 17, the FDA reported that it issued warning letters to three companies for marketing adulterated and misbranded COVID-19 antibody tests, stated an FDA news release. The agency sent warning letters to:

Medakit Ltd. of Sheung Wan, Hong Kong;
Antibodiescheck.com and Yama Group;
Dr. Jason Korkus, DDS, and Sonrisa Family Dental d/b/a My COVID19 Club of Chicago.

Jeff Shuren, MD, JD, Director of the FDA’s Center for Devices and Radiological Health — **In the FDA’s announcement,** **Jeff Shuren, MD, JD** **(above), Director of the FDA’s** **Center for Devices and Radiological Health**, said “When tests are marketed inappropriately, with inaccurate or misleading claims—such as the ability to perform the test completely at home, or that the test is authorized, cleared, or approved when it is not—they put the health of Americans at risk. Such conduct will not be tolerated by the FDA, and we will continue to monitor tests marketed in the US, taking appropriate action as warranted.” (Photo copyright: The Food and Drug Administration.)

Scams Reported Just in April

On April 17, the New York Times reported that a special agent with the HHS OIG noted that impostors seeking Medicare or Medicaid information posed as doctors or laboratory technicians to offer fake tests in nursing homes and assisted living facilities.

Earlier in April, The Texas Tribune reported that the owner of a freestanding emergency room in Laredo, Texas, spent $500,000 to buy 20,000 rapid COVID-19 tests for patients suspected of having COVID-19. Health officials in Laredo planned to establish a drive-through testing site and then administer tests that came from a manufacturer in China to detect active infections. After trying to validate the tests, city health officials found they were unreliable and unusable.

An April 9 report from the news department of the AARP (American Association of Retired Persons) stated that federal officials have found fake coronavirus testing sites in many states, including Alabama, Arizona, Florida, Georgia, Kentucky, New York, and Washington state.

The FBI, according to AARP, investigated several fake test sites in Louisville, Ky., after a city official reported that people in personal protective equipment (PPE) were collecting biological specimens from residents. Those seeking tests were told to pay $240 in cash or give their Medicare, Medicaid, or Social Security cards to verify their identity.

Fake drive-up testing sites were reported at gas stations and other locations in Louisville over a four-day period, the AARP reported.

On April 2, WRGB TV in Albany, N.Y., reported that scammers pretending to be from the New York State Department of Health (NYSDOH) were taking money and insurance information from people in exchange for fake coronavirus tests. One woman told police she got a fake test at a drive-up site in a Little League parking lot.

North Greenbush police said the scammers identified themselves as being with NYSDOH and collected money and insurance information from multiple people. Police and state officials said the DOH had no connection to the collection site in the parking lot.

Lessons for Lab Directors

For clinical laboratory directors and all clinical lab scientists, the lesson from these stories is to be wary of strangers offering COVID-19 testing, while also making certain to post information for customers about the legitimacy of your lab’s COVID-19 rapid molecular and serological tests. Doing so might involve providing proof that the FDA has allowed your tests to be used for the coronavirus.

Also, medical laboratories should ensure that all employees collecting specimens in public places display proper identification.

—Joseph Burns

Related Information:

HHS Takes Aim at COVID-19 Testing Fraud

FBI Warns of Potential Fraud in Antibody Testing for COVID-19

FBI Warns of Fraudulent Coronavirus Antibody Tests

BBB Scam Alert: Want a COVID-19 Test? There’s a Scam for That

FDA Issues Warning Letters to Companies Inappropriately Marketing Antibody Tests, Potentially Placing Public Health at Risk

FDA Updates List of Fake COVID Tests, Vaccines, and Treatments

COVID-19 Drive-Thru Test Site Shut Down

Homeland Security in Michigan Now Investigating Coronavirus Fraud

LA Sues California Company, Alleging ‘Sophisticated’ COVID-19 Fraud