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Myriad Genetics Settles Improper Medicare Billing Complaint for $9.1M

This article has been updated to include additional information from the complaint against Myriad Genetics filed in the US District Court for the District of South Carolina.

NEW YORK – Myriad Genetics has entered into a $9.1 million settlement agreement to resolve allegations that it improperly billed Medicare for its hereditary cancer tests, after the US Department of Justice declined to intervene in the matter.

The US Department of Health and Human Services, Office of Inspector General last year issued Myriad a subpoena to investigate allegations that it submitted false or improper claims for its hereditary cancer risk next-generation sequencing panel, myRisk, to Medicare and Medicaid. The subpoena covered a period from Jan. 1, 2014 through when OIG issued the subpoena in mid-March 2018.

In a Form 8-K filed Friday with the US Securities and Exchange Commission, Myriad said it has resolved the complaint filed by a private third party on behalf of the government in the US District Court for the District of South Carolina.

The complaint, unsealed by court order, identifies Elaine Jeter, former medical director of Medicare contractor Palmetto GBA, as the third party that brought the suit against Myriad on behalf of the US government. Palmetto administers the MolDx Program, which performs technical assessments of molecular tests and makes coverage determinations based on that assessment. Noridian, Myriad's Medicare contractor, aligns its coverage determinations for molecular tests with those issued by MolDx. 

According to the complaint, Jeter alleged that since launching the myRisk test in 2013, Myriad has been billing the government inappropriately by stacking legacy CPT codes 81211 and 81213, instead of following MolDx billing instructions. Between September 2015 and January 2016, MolDx instructed Myriad to bill for its myRisk test using a unique z-code and CPT code 81479, describing a "not otherwise classified" procedure, while the American Medical Association readied new Genomic Sequencing Procedure (GSP) codes to more appropriately described NGS panels for implementation in 2016. During this time, CMS decided to align its pricing for breast cancer-related NGS panels billed using code 81479 to the rate it paid for legacy codes 81211 and 81213 — around $2,700. 

When the new GSP codes went into effect on January 1, 2016, MolDX asked Myriad to bill for myRisk using its unique z-code and CPT code 81432 and used the gapfill process to set the price at $925. However, against MolDx's instructions to bill code 81432 and stop using legacy codes for its NGS panel, Jeter alleges in the complaint that Myriad continued to bill Medicare using a combination of 81211/81213 or code 81162. This, she claimed, allowed Myriad to receive around $2,700 or $2,500 for myRisk testing, depending on the codes used, which is almost three times the rate attached to 81432, the code MolDx instructed Myriad to bill. 

"Despite Myriad conducting tens of thousands of myRisk panels for Medicare patients during 2016 and 2017, Myriad has not billed Medicare using CPT code 81432 at all during those years," the complaint states. "Instead, Myriad has fraudulently billed Medicare tens of millions of dollars for thousands of legacy BRCA tests (Comprehensive BRACAnalysis, BRACAnalysis Rearrangement Test, and/or Integrated BRACAnalysis) that it did not perform in 2016 and 2017 by listing CPT codes and ... z-codes for Myriad’s legacy BRCA tests on Medicare claim forms despite discontinuing those tests in 2015." After Myriad launched myRisk NGS panel in 2013, the company indeed phased out its legacy BRCA tests for hereditary cancer assessment. 

However, under the terms of the settlement Myriad "denies any and all allegations or claims of improper actions or omissions." Jeter is under a confidentiality agreement, meaning she cannot discuss certain matters related to the case. 

Myriad highlighted these aspects of the settlement in a statement on Friday. "After a 17-month investigation, the Department of Justice declined to intervene in the case," the company said. "In order to avoid a lengthy and distracting litigation with the relator, the company entered into a settlement agreement on July 18, 2019 to resolve the matter for $9.1 million."

The settlement agreement is pending written government approval. In addition to denying any wrongdoing, Myriad said it doesn't expect to have to change its billing practices. The company added that it "believes it demonstrated that the key allegations made in the complaint were false."

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