Dive Brief:

  • HHS’ Office of Inspector General issued a special alert to medical professionals detailing characteristics of fraudulent schemes by companies offering to facilitate telemedicine services and urged practitioners to use caution to avoid involvement in such arrangements.
  • The new warning comes on the heels of a coordinated law enforcement action with the Justice Department and CMS that led to criminal charges against 36 defendants for more than $1.2 billion in healthcare fraud involving telemedicine, cardiovascular and cancer genetic testing and durable medical equipment schemes.
  • Companies intending to commit telehealth fraud often use illegal kickbacks to recruit practitioners to further their schemes, offering to pay them a fee for ordering or prescribing medications, equipment or services for patients they never examined, the OIG said. Those companies then submit fraudulent claims to Medicare, Medicaid and other federal healthcare programs.

Dive Insight:

As the use of telehealth to reach patients in their homes surged during the pandemic, so too have the number of schemes tied to companies offering to arrange fraudulent telemedicine services.

While the cases vary in design, kickbacks are a common element, the OIG said. Payments to healthcare practitioners are sometimes described as fees for review, audit, consulting or assessment of medical charts, but healthcare providers are not given the opportunity to review patient records.

In another sign of fraud risk, telemedicine companies identify or recruit purported patients for whom the practitioner orders or prescribes items or services. Practitioners are often told they do not need to contact the patient, or only need to speak to the patient by phone.

The telemedicine company may offer to compensate the practitioner based on volume of items or services ordered, which may be characterized as payment based on the number of medical records reviewed, the OIG said.

In addition, fraudster companies do not accept insurance from payers other than federal healthcare programs, though they may claim to furnish items and services to people who are not federal program beneficiaries. Only one product or single class of products may be offered, potentially limiting a practitioner’s treatment options.

In last week’s federal crackdown, CMS’ Center for Program Integrity took administrative actions against 52 providers involved in telemedicine fraud schemes, on top of the DOJ’s charges.

The escalation of healthcare fraud exploiting the pandemic has stretched beyond telehealth to schemes involving COVID-19 testing and fake vaccination record cards. The DOJ in April filed criminal charges against 21 defendants accused of falsely billing federal programs in connection with those forms of fraud.

In fiscal 2021, the federal government won or negotiated a record total of more than $5 billion in healthcare fraud judgments and settlements.


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