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Examination of Genetic Testing Labs

There's promise and excitement surrounding genetic and genomic tests, but the New York Times reports there's also the potential for fraud as such testing has transformed into a $6 billion industry.

"It sounds so legitimate — who doesn't want safe medicine?" Howard McLeod, the medical director of the personalized medicine institute for Moffitt Cancer Center, tells the Times.

The entire lab industry, it notes, is under scrutiny by the US Justice Department regarding its relationship with physicians. The Times in particular focuses on the case of Renaissance RX.

According to the Times, Renaissance received some $130 million in Medicare funds and $55 million from investment firm TPG for a sweeping personalized medicine study, and doctors received $75 for each patient they enrolled in the study and tracked.

But physicians like Scott Wilson became concerned about what they viewed as pressure to enroll ineligible patients into the study, and Medicare began to look into the company's billing and payment practices, the Times reports. Medicare suspended payments late last year, and Renaissance stopped its study.

"It is unfortunate that the Medicare review process has effectively crippled a burgeoning start-up," the company tells the Times in a statement. "While the principals of Renaissance RX have confidence about the eventual outcome of the review, this extended delay continues to create great challenges."

The Times notes that two of the company's principals had a previous run-in with Medicare when they were at Natural Molecular for suspected fraud, and the Justice Department embarked on a criminal investigation.

The case also calls into question, the Times adds, whether Medicare and private investors are being caught up in the promise of genetic testing and not following through enough on their due diligence duties.

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