Monroeville man to plead guilty in $127 million Medicare scheme, officials say

A Monroeville business owner is expected to plead guilty in a $127 million kickback scheme against Medicare patients, according to a U.S. Attorney’s Office spokeswoman.

Ravitej Reddy, 52, is accused of conspiring with multiple companies to pay kickbacks for lab tests done at his two genetic testing facilities. He was charged via indictment on Nov. 26.

The plea hearing is scheduled for Jan. 10. Reddy is expected to waive an indictment through a grand jury and plead guilty to four counts related to conspiracy, officials said.

“There are two ways of charging people,” said Margaret Philbin, a spokeswoman for the U.S. Attorney’s Office of the Western District of Pennsylvania. “They can take information to a grand jury and ask them to return an indictment. Or there’s a bill of information, which means the defendant and the government have reached an agreement to plead guilty to charges contained in the information.”

Reddy owns Personalized Genetics LLC in Pittsburgh and Med Health Services Management in Monroeville.

The information, reached through an investigation led by the FBI and the U.S. Department of Health and Human Services, said Reddy developed a scheme for billing Medicare about $127 million for two kinds of genetic testing at his labs from May 2018 to April.

One test uses DNA sequencing to detect mutations that could indicate cancer risk. The other detects effectiveness of medications.

Reddy and six conspirators allegedly collected DNA samples from Medicare beneficiaries by having marketers reach out to them. The marketers would ask beneficiaries to submit cheek swabs using kits sent to their homes. They also brought kits to health fairs across the country.

Marketers were then paid kickbacks if samples were sent to Reddy’s labs, prosecutors said.

Reddy also paid kickbacks to a telemedicine company that he used to get fraudulent prescriptions from doctors hired to review patients’ medical histories, prosecutors contend. Those doctors would then authorize further testing without the proper telemedicine visits, officials said.

Proescutors said Reddy’s labs received $60 million in reimbursements from more than $127 million in bills from Medicare.

Reddy’s attorney, Mark Rush, did not respond to a request for comment.