On July 20, 2022, the Department of Justice (DOJ) charged dozens of individuals for $1.2 billion in healthcare fraud violations. The cases focused on telemedicine, clinical laboratories, and durable medical equipment fraud. https://www.justice.gov/opa/pr/justice-department-charges-dozens-12-billion-health-care-fraud On the same day, the Office of Inspector General for the Department of Health and Human Services (HHS OIG) issued a special fraud alert directing “practitioners to exercise caution when entering into arrangements with purported telemedicine companies” (“Alert”; https://oig.hhs.gov/documents/root/1045/sfa-telefraud.pdf.)
The Alert states that companies that purported to provide telehealth, telemedicine, or telemarketing services (Telemedicine Companies) exploited the growing acceptance and use of telehealth. While the alleged fraud schemes vary in design, according to the Alert, one common element is the way that the Telemedicine Companies have used kickbacks to aggressively recruit and reward practitioners to further the fraud schemes. In many of these arrangements, Telemedicine Companies pay practitioners in exchange for ordering or prescribing items or services: (1) for purported patients with whom the practitioners have limited, if any, interaction; and (2) without regard to medical necessity.
The Alert lists the following seven suspect characteristics related to practitioner arrangements with Telemedicine Companies which could suggest an arrangement that presents a heightened risk of fraud and abuse.
- Recruiting patients. The purported patients for whom the practitioner orders or prescribes items or services were identified or recruited by the Telemedicine Company, telemarketing company, sales agent, recruiter, call center, health fair, and/or through internet, television, or social media for free or low out-of-pocket items or services.
- Insufficient initial patient contact. The practitioner does not have sufficient contact with or information from the patient to meaningfully assess the medical necessity of the items or services ordered or prescribed.
- Volume based compensation. The Telemedicine Company compensates the practitioner based on the volume of items or services ordered or prescribed, which may be characterized as practitioner compensation based on the number of medical records reviewed.
- Only federal payors. The Telemedicine Company only furnishes items and services to federal program beneficiaries and does not accept insurance from other payors.
- False representations of only private payors. The Telemedicine Company claims to only furnish items and services to individuals who are not federal program beneficiaries but may bill federal health care programs.
- Limited products. The Telemedicine Company only furnishes one product or a single class of products.
- No follow up. The Telemedicine Company does not expect practitioners to follow up with patients nor does it provide practitioners with the information required to follow up with patients.
Overall, while there is greater willingness to utilize telemedicine by patients and providers because of COVID-19 and legislative changes, providers should be vigilant with their practices and understand what is permissible in this developing area. Based on its growth, the recent DOJ activity and the Telehealth Fraud Alert, telemedicine will certainly continue to be scrutinized by the government.