A Houston laboratory’s $36.4 million settlement over kickbacks and unnecessary genetic tests is the latest entry in a fraud category that Justice Department and federal audit records show has become a durable, repeatable business model — one that is expanding even as enforcement breaks records.
On July 30, the Justice Department announced that a Houston genetic-testing laboratory, its former chief executive, and a Florida businessman would pay a combined $36.4 million to resolve allegations that they paid kickbacks and billed Medicare and Medicaid for medically unnecessary genetic tests. Paired with two criminal guilty pleas, the settlement closes one more file in a fraud category that federal prosecutors have been chasing for the better part of a decade.
It is also a near-perfect template. According to the department’s filings, Access DX Laboratory, its former CEO Michael Stewart, and Florida businessman Harold Shatz, between January 2018 and January 2020, paid marketers for patient referrals, used “unbundled” billing codes to inflate reimbursement, and paid telemedicine providers for what the government characterized as false and fraudulent doctors’ orders. Strip out the names and the dollar figure, and the same paragraph could describe dozens of cases the government has brought since 2019 — including the $2.1 billion scheme that produced one of the largest health care fraud takedowns in American history.
That repetition is the story. A review of Justice Department and Department of Health and Human Services records shows that genetic-testing fraud has hardened into a recognizable business model — a recruiter, a telehealth “prescriber,” a laboratory, and a Medicare claim — that reappears case after case, even as federal spending data indicate the underlying market is growing and enforcement is setting records. The consistency of the design, across seven years and billions of dollars, is what makes the Access DX settlement less an ending than a data point.
A $36 million settlement, built on admitted conduct
Unlike a purely civil resolution, the Access DX matter carries admitted criminal conduct. Court records cited by the department show that Stewart agreed on June 24 to plead guilty to conspiracy to defraud the United States and to pay and receive health care kickbacks under 18 U.S.C. § 371, in United States v. Stewart, No. 4:22-cr-328 (S.D. Tex.). Shatz entered a parallel plea on October 15, 2025, in United States v. Shatz, No. 4:24-cr-330 (S.D. Tex.). Both men entered civil False Claims Act settlements at the time of their pleas.
The mechanics the government alleges are worth spelling out, because they recur. “Unbundling” refers to billing the individual components of a genetic panel separately rather than under a single, lower-paying code, a practice that can multiply a lab’s reimbursement for the same specimen. The telemedicine layer supplies the paperwork: rather than a treating physician ordering a test after examining a patient, a contracted provider signs an order — sometimes after a brief phone call, sometimes after none — that gives the claim the appearance of medical necessity. Marketers, paid per referral, feed patients into the pipeline. Each link is individually deniable; assembled, according to prosecutors, they form a scheme.
The civil recovery originated with a whistleblower. Douglas Green, the president of a Massachusetts marketing company that had been hired to market genetic testing to Medicare and Medicaid beneficiaries, filed a qui tam complaint under the False Claims Act, captioned U.S. ex rel. Green v. Access DX Lab LLC, No. 1:19-cv-2845 (N.D. Ga.). Under the statute’s whistleblower provisions, Green is set to receive a $7.2 million share of the settlement. As part of the resolution, Access DX also entered a five-year Corporate Integrity Agreement with the HHS Office of Inspector General (HHS-OIG) requiring compliance auditing, training, and a review of its arrangements with referral sources.
“Healthcare referrals must reflect the best decision for patients, not the influence of kickbacks,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. Miranda L. Bennett, HHS-OIG’s acting deputy inspector general for investigations, framed the harm more broadly: kickbacks and unnecessary genetic testing, she said, “not only drain taxpayer-funded federal health care programs, but undermine the integrity of our U.S. health care system and drive up health care costs for all of us.” Except to the extent admitted in the two plea agreements, the department noted, the settled civil claims are allegations only, and there has been no determination of liability.
The same scheme, again and again
The Access DX resolution did not arrive in isolation. Within the same three weeks of July 2026, the department announced a cluster of laboratory settlements. A Florida genetic and oncology testing company, NeoGenomics Laboratories, agreed to pay roughly $9.8 million after self-disclosing that it had provided below-fair-market-value consulting services — a different alleged violation, resolved through voluntary disclosure. A Dallas laboratory, Magnolia Diagnostics, and its owners agreed to pay $19.2 million — part of a $24 million resolution reached with investors — over COVID-19 testing fraud allegations. And Labcorp agreed to pay $14.5 million to resolve separate False Claims Act allegations. The conduct differs case to case, but each traces back to the same pressure point: the laboratory bench, where a single test order can generate hundreds or thousands of dollars in federal reimbursement.
The template Access DX is accused of following was pioneered at scale in September 2019, when prosecutors in five federal districts charged 35 defendants tied to dozens of telemedicine companies and cancer genetic-testing (CGx) laboratories. That operation — code-named Double Helix — accused the defendants of fraudulently billing Medicare more than $2.1 billion, making it, at the time, one of the largest health care fraud schemes ever charged. The mechanics were the same ones later alleged at Access DX: a telemarketing network lured hundreds of thousands of elderly and disabled patients, and doctors were paid to approve CGx tests after either no interaction or a brief phone call with people they had never met or examined. Ten medical professionals, including nine physicians, were charged.
Between that 2019 takedown and this month’s settlement, the essential design — recruiter, telehealth prescriber, lab, and Medicare — has barely changed. What changes is the label on the test: cardiovascular panels, cancer-risk sequencing, pharmacogenetic screens. The scheme is largely indifferent to the science; it is organized around the reimbursement code.
Why genetic tests? Follow the reimbursement
The reason the same scheme keeps reappearing is visible in the government’s own spending data. In a data snapshot issued in January 2026 (report number OEI-09-25-00330), HHS-OIG reported that Medicare Part B spending on clinical laboratory tests reached $8.4 billion in 2024, a 5 percent increase over the prior year. Within that total, genetic tests — a small share of test volume — accounted for 43 percent of all Part B lab spending, topping $3.6 billion. Spending on ordinary tests such as metabolic panels, lipid panels, and blood counts has been declining since 2021, falling to $4.8 billion; genetic testing has moved sharply in the other direction.
The economics explain the appeal. According to the same OIG analysis, the single test with the highest expenditures in 2024 was a genetic test with a median payment of $447 per claim — many times the reimbursement of a routine blood panel. A scheme that can manufacture a signed order for a high-value genetic panel, whether or not the patient needs it, converts a cold telemarketing call into a four-figure Medicare claim. Those figures are not an enforcement estimate but a direct readout of what the program paid, published under a mandate of the 2014 Protecting Access to Medicare Act, which changed how Medicare reimburses lab tests and directs OIG to publish an annual analysis of the 25 costliest ones. OIG has kept “trends and vulnerabilities in genetic tests” on its active work plan, a signal that it regards the category as an unresolved risk rather than a solved problem.
Record enforcement, recurring fraud
The government’s enforcement response has grown to match the numbers — at least on paper. On June 30, 2025, the Justice Department announced the results of its 2025 National Health Care Fraud Takedown, charging 324 defendants across 50 federal districts in schemes involving more than $14.6 billion in intended losses — the largest such action in department history, more than doubling the prior record of $6 billion. Of those defendants, 49 were charged in connection with more than $1.17 billion in fraudulent Medicare claims tied specifically to telemedicine and genetic-testing schemes. In one Southern District of Florida case cited by the department, the owner of telemedicine and durable-medical-equipment companies was charged in a $46 million scheme that allegedly targeted Medicare beneficiaries through deceptive telemarketing before billing for equipment and genetic tests. Since the Health Care Fraud Strike Force model began in 2007, the department noted, it has charged more than 5,400 defendants who collectively billed public and private insurers over $27 billion.
The civil recoveries are climbing too. In January 2026, the department reported that False Claims Act settlements and judgments exceeded $6.8 billion in fiscal year 2025 — the highest single-year total in the statute’s history — with more than $5.7 billion of it tied to the health care industry. Whistleblowers filed 1,297 qui tam suits, a record, up from the previous high of 980 the year before, when total FCA recoveries were about $2.9 billion. Measured against those totals, the Access DX case — with its $7.2 million relator’s share — is a single tile in a very large mosaic.
Yet the recurrence of the same scheme design points to a persistent gap between recovery and prevention. The warning tools have been in place for years. In July 2022, HHS-OIG took the rare step of issuing a Special Fraud Alert — one of only a handful it has published since 2003 — describing almost exactly the arrangements at the center of these cases: telemedicine companies that pay for orders, furnish only a single class of product such as genetic tests or durable medical equipment, and do not require providers to follow up with patients. That alert accompanied a coordinated enforcement action against 36 defendants over more than $1.2 billion in telemedicine fraud. Four years later, the Access DX settlement describes conduct the alert had specifically flagged as a red line.
The government says it is working to shorten the lag between billing and detection. Alongside the 2025 takedown, the department announced a Health Care Fraud Data Fusion Center intended to pool analysts from DOJ, HHS-OIG, and the FBI and apply advanced data analytics to spot anomalous billing earlier. The Access DX release notes that the administration this year also stood up a Task Force to Eliminate Fraud and a National Fraud Enforcement Division as part of what it describes as an expanded effort against fraud, waste, and abuse in federal programs. Whether those structures can get ahead of a scheme that reinvents itself faster than individual cases can be built is the open question the numbers pose.
What the record shows
For now, the pattern in the public record is consistent: a laboratory, a set of paid marketers, telemedicine prescribers, and a high-value genetic test, resolved years later by a settlement and, in the more serious cases, a guilty plea. The Access DX resolution recovers $36.4 million and imposes five years of federal oversight, and its two criminal pleas mark it as more than a billing error. But the OIG’s own data show genetic-testing spending still climbing, and the recurrence of near-identical schemes across seven years suggests the incentives that drive them remain intact.
The most reliable early-warning system, the record suggests, is still the whistleblower. It was an insider — a marketer who understood exactly how the referrals worked — who first brought the Access DX allegations to the government in 2019, years before this month’s settlement was signed. The record count of qui tam filings indicates that more such insiders are coming forward. The enforcement machinery behind them is larger and better funded than ever; the fraud, for now, is proving just as durable.
Access DX and its former executives did not admit civil liability under the terms of the settlement, and the company could not be reached for comment prior to publication; this article will be updated with any response. The criminal cases against Stewart and Shatz were resolved through their respective plea agreements, and, apart from the conduct admitted in those pleas, the government’s civil allegations have not been adjudicated.