Lab owner to plead guilty in Medicare kickback scheme

A Pennsylvania business owner has agreed to plead guilty in a $127 million kickback scheme involving his genetic testing labs

PITTSBURGH -- A Pennsylvania business owner has agreed to plead guilty in a $127 million kickback scheme involving his genetic testing labs.

Ravitej Reddy is scheduled to plead guilty to federal charges that he conspired with out-of-state marketing companies to pay kickbacks for lucrative lab tests at his two testing facilities, the Pittsburgh Post-Gazette reported Tuesday.

A plea hearing is scheduled for Jan. 10.

Reddy, owner of Personalized Genetics LLC in Pittsburgh and Med Health Services Management in Monroeville, was charged Nov. 26.

The case involves two types of genetic testing, one that's supposed to detect an elevated risk of cancer and another that's supposed to help predict the effectiveness of certain medications in particular patients.

According to court documents, Reddy and his co-conspirators paid kickbacks to marketers who induced thousands of Medicare patients around the country to submit cheek swabs for genetic testing; paid kickbacks to a Georgia telemedicine company whose doctors wrote bogus prescriptions for the testing; and billed Medicare even though the samples had to be tested by outside labs because Reddy's labs lacked the proper equipment.

Prosecutors said that Reddy's labs billed Medicare more than $127 million between May 2018 and April 2019, with reimbursements totaling about $60 million.

U.S. Attorney Scott W. Brady has said Reddy and his “partners in crime” orchestrated a “sophisticated, nationwide kickback scheme."

Reddy and his lawyers have not commented on the case.