Report: PerkinElmer under investigation for Medicare fraud

PerkinElmer (NYSE:PKI) is under federal scrutiny for alleged involvement in a scam to bill Medicare for tens of thousands of unnecessary genetic cancer tests, according to a report by Reuters.

The news agency cited three unidentified sources and government documents linking the Waltham, Mass.-based diagnostic and scientific instrument company to the probe. PerkinElmer acknowledged that it has received government subpoenas regarding investigations into third parties and said it is cooperating with authorities, but denied knowledge of wrongdoing.

“The company is not aware of, and has not received any information regarding, wrongdoing by PerkinElmer, as implied by Reuters, nor does PerkinElmer have any information that the company or any of our personnel are the target of a government investigation,” the company added in a statement.

Reuters reported that PerkinElmer ran high volumes of tests for some laboratory clients, two of whom the federal government previously charged with Medicare fraud. Sources told the news agency that investigators want to determine whether the company knew or should have known that the tests were not medically necessary and that its laboratory customers were billing Medicare for them.

The tests determine a patient’s risk for developing hereditary diseases such as breast or colorectal cancer, Reuters reported. Medicare pays for the tests if ordered by the patient’s physician. Some PerkinElmer employees flagged the tests because the patients didn’t fit the profile for such tests and few results pointed to a risk of cancer, the news agency added.

PerkinElmer said it supports government efforts to identify and prevent abusive practices in healthcare.