Telemedicine Fraud — An Alert from the OIG
HHS OIG Special Fraud Alerts are not very common. In fact, in the last 28 years since 1994, the OIG has only published a Special Fraud Alert 12 different times. Consequently, when they post a new Special Fraud Alert, the healthcare compliance industry should take notice.
The most recent Special Fraud Alert was posted July 20, 2022 and addresses risks associated with “Purported Telemedicine Companies,” which the OIG describes as including telehealth, telemedicine, or telemarketing.
The OIG and DOJ have been busy with enforcement cases in this area lately, so it comes as no surprise that a Special Fraud Alert on this topic has been released. For example, earlier this year a nurse practitioner was found guilty at trial of health care fraud associated with telemedicine. The nurse practitioner signed unnecessary orders for orthotic braces for patients she never examined or spoke to. According to the U.S. Attorney involved in the case, “Her greed was her undoing – and she is now being held accountable for targeting the elderly with her serial fraud.”
Trial testimony and court records demonstrated the nurse practitioner assisted with orders for more than 3,000 orthotic braces. Her co-conspirators captured identities of senior citizens through a telemarketing scheme and sent the information along as “leads.” The nurse practitioner then signed her name to medical records where she claimed she provided examinations of those patients and created orders even though she never met or spoke with the patients. The orders were then sold to companies that would generate reimbursement from Medicare.
In Michigan, a number of clinicians were investigated both criminally and civilly for their alleged involvement in telemedicine schemes. The investigation was called “Happy Clickers” in reference to many of the practitioners’ habits of approving these orders with little to no review. Reportedly, the physicians and nurse practitioner involved signed off on illegitimate orders for medical braces and cancer genetic testing promoted by telemarketers essentially stating the services did not meet requirements for medical necessity. One of the practitioners pleaded guilty and admitted to signing braces and cancer genetic testing when he typically executed the orders without reviewing the records. The DOJ press released reported, for example, a one-week period where he signed approximately 335 separate single-patient files spending on average 18 seconds from the time he opened the record to the time he executed it. And he continued to approve these orders, even after an investigator for a health insurer warned him that the patient referrals were the result of aggressive telemarketing. One of the Michigan doctors involved agreed to settle the allegations by making a financial payment. In this case, the doctor was alleged to have ordered medically unnecessary cancer genetic testing for Medicare beneficiaries for cancer screening purposes. Generally, Medicare does not cover genetic testing solely for the purpose of screening for cancer.
These are just some of the many recent enforcement cases involving telemedicine services. It’s no wonder the OIG decided to issue a Special Fraud Alert.
Special Fraud Alert
The OIG’s alert calls out telemedicine companies who intentionally pay practitioners kickbacks to generate orders or prescriptions for medically unnecessary durable medical equipment, genetic testing, wound care items, or prescription medications.
OIG is careful to explain the fraud schemes vary in design and operation, and they can involve a wide range of different individuals and types of entities, including international and domestic telemarketing call centers, staffing companies, practitioners, marketers, brokers, and others.
Some of the biggest red flags include circumstances where the clinicians have little or no interaction with the patient. Another hallmark outlined in the alert is a lack of medical necessity for services being ordered.
A major section of the Special Fraud Alert focuses on “suspect characteristics” of purported telemedicine companies based on OIG's and DOJ's enforcement experience. The alert lists the following characteristics that could present a heightened risk of fraud and abuse:
- 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 advertising for free or low out-of-pocket cost items or services.
- The practitioner does not have sufficient contact with or information from the purported patient to meaningfully assess the medical necessity of the items or services ordered or prescribed.
- The telemedicine company compensates the practitioner based on the volume of items or services ordered or prescribed, which may be characterized to the practitioner as compensation based on the number of purported medical records that the practitioner reviewed.
- The telemedicine company only furnishes items and services to federal health care program beneficiaries and does not accept insurance from any other payor.
- 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 health care programs.
- 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.
- The telemedicine company does not expect practitioners (or another practitioner) to follow up with purported patients nor does it provide practitioners with the information required to follow up with purported patients.
The OIG is also careful to say that this Special Fraud Alert is not intended to discourage legitimate telehealth arrangements. Many practitioners appropriately use telehealth services to provide medically necessary care to their patients. But as the name of document states, it is a ‘fraud alert,’ intended to raise awareness of the potential for fraud and abuse. The alert closes with the following: “OIG encourages practitioners to use heightened scrutiny, exercise caution, and consider the above list of suspect criteria prior to entering into arrangements with telemedicine companies.”
Additionally, this Special Fraud Alert is just the most recent post in a broader oversight effort regarding telehealth services in general. The OIG has dedicated a page of their website to their telehealth oversight activities (see here: https://oig.hhs.gov/reports-and-publications/featured-topics/telehealth/). It includes, among other things, links to past and anticipated OIG Work Plan items relating to telehealth, as well as audits, inspections, and graphics that can be used in your compliance programs efforts to assess telehealth compliance risks.
Watch a short video on the OIG's Special Fraud Alert.
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