U.S. News
A Whistleblower Exposed a $36.4 Million Genetic Testing Fraud That Drained Medicare and Medicaid
By Mike Harper · July 31, 2026
They paid kickbacks for patients. They paid doctors for fake orders. Then they billed Medicare for tests nobody needed.
Access DX Laboratory, a Houston-based genetic testing company, its former CEO Michael Stewart, and Florida businessman Harold Shatz have agreed to pay a combined $36.4 million to settle allegations that they violated the False Claims Act by running a kickback-and-billing scheme that drained Medicare and Medicaid funds over two years.
The Department of Justice alleged that from January 2018 through January 2020, Access DX paid kickbacks to marketers in exchange for patient referrals for genetic testing. The lab also allegedly paid telemedicine providers for false and fraudulent doctors’ orders, unbundled billing codes to inflate reimbursements, and submitted claims for tests that were medically unnecessary.
“Healthcare referrals must reflect the best decision for patients, not the influence of kickbacks.” Assistant Attorney General Brett A. Blanton said.
Stewart agreed in June to plead guilty to conspiracy to defraud the United States and to pay and receive health care kickbacks. Shatz agreed to the same charge in October 2025. Both men entered civil False Claims Act settlements at the time of their guilty pleas.
The fraud was exposed by a whistleblower — Douglas Green, the president of a Massachusetts marketing company that had been hired to market genetic testing to Medicare and Medicaid beneficiaries. Green filed a sealed lawsuit under the False Claims Act’s qui tam provisions, which allow private citizens to sue on behalf of the government and share in the recovery. He will receive $7.2 million from the settlement.
The scheme followed a pattern federal prosecutors have seen repeatedly in the genetic testing industry: companies use marketers to recruit patients — often elderly Medicare beneficiaries — for testing they don’t need, then bill the government at rates that generate enormous revenue. The kickbacks ensure a steady flow of patients. The fake orders ensure the tests get approved. The billing codes ensure maximum reimbursement.
“Kickbacks and medically unnecessary genetic testing schemes not only drain taxpayer-funded federal health care programs but undermine the integrity of our health care system and drive up costs for all of us.” Acting Deputy Inspector General Miranda L. Bennett said.
As part of the settlement, Access DX entered into a five-year Corporate Integrity Agreement with the HHS Office of Inspector General, requiring auditing, compliance training, and a review of all arrangements with referral sources.
The $36.4 million recovers a fraction of what the scheme cost taxpayers. What it doesn’t recover is the trust of the Medicare beneficiaries who were told they needed genetic tests that their own doctors never ordered.