Characteristics of Telemedicine Healthcare Fraud and Abuse as Defined by DOJ & OIG

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HERE IS HOW

The Office of the Inspector General (OIG) for the United States Department of Health and Human Services (HHS) recently issued a special fraud alert regarding telemedicine fraud and abuse. Claims leading to the alert involved companies within the telehealth, telemedicine, and telemarketing sector offering inferior healthcare quality and leading to unwarranted orders for procedures and medications. As asserted by the OIG in the alert, these telemedicine companies have “exploited” the acceptance and use of telehealth. The alert also addressed the impact of these abuses by stating “the potential for considerable harm to Federal health care programs and their beneficiaries.” 

The OIG clarified that this alert should not affect the operations of certified and legitimized telehealth organizations. The OIG noted in 2021, “for most, telehealth expansion is viewed positively, offering opportunities to increase access to services, decrease burdens for both patients and providers, and enable better care, including enhanced mental health care.” 

Characteristics of Telemedicine Fraud and Abuse

To help practitioners distinguish between the compromised and bona fide telemedicine companies, the OIG has developed a list of suspect characteristics related to telemedicine arrangements that, taken together or separately, could allude to telemedicine healthcare fraud and abuse. 

1. The professed patients for whom the practitioner (clinician) orders or prescribes items or services were identified or recruited by the telemedicine company, telemarketing company, sales agent, recruiter, call center, health fair, and through the internet, television, or social media advertising for free or low out-of-pocket cost items or services.

2. The practitioner has insufficient contact with or information from the professed patient to determine the medical necessity of the items or services ordered or prescribed.

• For example, OIG noted instances where a telemedicine company requires the practitioner to use audio-only technology to facilitate engagement with professed patients, regardless of their preference, and does not provide the practitioner with other telehealth modalities.
• Additionally, a telemedicine company may provide a practitioner with “medical records” that reflect only cursory patient demographic information or medical history. These records may appear to be a template, lacking sufficient clinical information to inform the practitioner’s decision-making.

3. The telemedicine company compensates the practitioner based on the volume of items or services ordered or prescribed, which may be characterized as compensation based on the number of supposed medical records the practitioner reviewed.
4. The telemedicine company only furnishes items and services to Federal health care program beneficiaries and does not accept insurance from any other payer.
5. The telemedicine company claims to only furnish items and services to individuals who are not Federal health care program beneficiaries but may, in fact, bill Federal healthcare programs.

• An attempt to carve out Federal health care program beneficiaries from arrangements with telemedicine companies may result in criminal, civil, or administrative liability for a practitioner’s role in a fraudulent activity involving Federal health care program beneficiaries.

6. The telemedicine company only furnishes one product or a single class of products (e.g., durable medical equipment, genetic testing, diabetic supplies, or various prescription creams), potentially restricting a practitioner’s treating options to a predetermined course of treatment.
7. The telemedicine company does not expect practitioners (or another practitioner) to follow up with patients, nor does it provide practitioners with the information required to follow up with patients (e.g., the telemedicine company does not require practitioners to discuss genetic testing results with each purported patient).

Increasing DOJ and HHS-OIG Investigations

Current diversification in the patient-payer mix, the expiration of PHE waivers, and the abatement of the pandemic are predicted to lead to an increase in DOJ and HHS-OIG investigations of healthcare fraud and abuse in telemedicine companies. Enforcement scrutiny would be expected to arrive in the form of:

1. Search warrants
2. DEA subpoenas
3. Grand Jury subpoenas
4. Civil investigative demands (CIDs) from DOJ in connection with False Claims Act  investigations, and
5. HHS-OIG inquiries concerning Civil Monetary Penalty and other investigations and audits. 

Furthermore, the DOJ has renewed its pledge to hold individual executives personally liable for wrongdoing. 

Implications for Telemedicine and Digital Health Companies

Plan for DOJ and OIG Investigations

Waivers will soon end, requiring responsible entrepreneurs and investors to anticipate this upcoming wave of DOJ and OIG investigations and alter their practices to conform accordingly. In short, telemedicine companies and their providers are encouraged to conduct a full compliance review of their current operations and arrangements, identify risk areas, and promptly correct them.

Healthcare Fraud and Abuse Compliance Program

Another prudent approach, particularly for those companies moving into third-party reimbursement, is implementing a healthcare fraud and abuse compliance program. It could not only serve as a mitigating factor if a company becomes the target of an investigation, but it can also correct any errant operations, thereby avoiding the prospect of becoming a target in the first place. Compliance program costs are customized and scaled to the specific company size and need not be a significantly expensive undertaking.

Conclusions

There is a significant difference between bona fide digital health services and compromised businesses engaging in healthcare fraud and abuse. With the published alert described above, telemedicine companies and their providers are put on notice that the DOJ and OIG will not tolerate telemedicine fraud and abuse. They will soon launch a far-reaching wave of investigations to stop the abuses arising from the pandemic.

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