Report: Troops Duped in Alleged Tricare Fraud

A reported Tricare scheme in which users’ DNA was collected in exchange for gift cards and used to order expensive, unneeded lab tests could be the latest example of Tricare fraud -- and a lesson in why beneficiaries should not give out their ID card or Social Security numbers in exchange for payment.

A salesman working with a Texas-based laboratory that conducts genetic and drug screening enticed service members to be screened for a variety of illnesses and drugs by setting up makeshift clinics at strip malls near Fort Hood, Texas, CBS News reported this week.

According to that story, the scheme produced more than $5 million in reimbursements last year for unneeded tests through Origen Laboratories. Tricare beneficiaries who signed up for the program were given $50 Walmart gift cards in exchange for their DNA, urine and a photocopy of their military ID card, the story says.

Cases of suspected Tricare fraud are investigated by the Department of Justice. Defense Department officials said they could not comment on the report.

"The Defense Department cannot discuss potential or ongoing investigations, or whether or not a specific individual or entity is the subject of an investigation," said Air Force Maj. Benjamin Sakrisson, a DoD spokesman.

Officials with Cockerell Dermatopathology, which operated Origen Laboratories, said they are refunding the money made through the tests in question.

"When Origen became aware that certain individuals were operating outside of the organization’s strict compliance requirements regarding the manner in which laboratory services are marketed, we took immediate action, including terminating individuals and relationships with those that acted in violation of the laboratory's compliance policies," they wrote in a statement on their website. "We are also voluntarily refunding monies resulting from these activities. In no case did Origen or Cockerell profit from these activities as suggested by the CBS story."

According to DoD policy, DoD ID cards can be photocopied only to obtain entitled military benefits or for federal use, the instruction says. Acceptable uses include copying it for "medical care processing, check cashing, voting, tax matters … or administering other military-related benefits to eligible beneficiaries."

But even though the reported plot was for a medical purpose, Tricare officials said that beneficiaries should never give out their personal health information or DoD ID card in exchange for any kind of reimbursement, even if it is advertised as being for medical reasons. 

Fraud investigations are not uncommon within Tricare, documents posted by the agency show. In 2015, for example, Tricare judgments and settlements resulted in $61.2 million in repayments.

Additionally, Tricare last year closed a loophole in its compounded medication pharmacy policy that allowed for some physicians to prescribe medication in exchange for kickbacks. As part of that change, the DoD recouped more than $240 million while the Justice Department still has more than 100 investigations under way, Tricare officials said.

-- Amy Bushatz can be reached at amy.bushatz@military.com.