What You Can Learn From This 1 Billion Dollar Telemedicine Fraud Bust

$1 Billion Dollar Fraud Bust

A recent fraud bust totaling over $1 Billion involving telemedicine and durable medical equipment (DME) companies shows just how effectively compliance enforcement is evolving alongside healthcare. The effort resulted in charges against 24 defendants, including the CEOs, COOs, and others associated with five telemedicine companies, the owners of dozens of durable medical equipment (DME) companies and three licensed medical professionals, for their alleged participation in the healthcare fraud schemes.

“Hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders…”

So what happened? Are you ready for this? It sounds like a movie. In short, some of the defendants allegedly controlled an international telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America. The defendants allegedly paid doctors to prescribe DME either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen. Further allegations in court documents showed some of the defendants obtained patients for the scheme by using an international call center that advertised to Medicare beneficiaries and “up-sold” the beneficiaries to get them to accept numerous “free or low-cost” DME braces, regardless of medical necessity. The international call center allegedly paid illegal kickbacks and bribes to telemedicine companies to obtain DME orders for these Medicare beneficiaries. The telemedicine companies then allegedly paid physicians to write medically unnecessary DME orders. Finally, the international call center sold the DME orders that it obtained from the telemedicine companies to DME companies, which fraudulently billed Medicare.

Small Physician Practices Are Not Safe From Fraud Enforcement

$1 Billion is massive and so you might be thinking that there’s no way something that large could happen at your small practice but not all telemedicine enforcement is large scale. Small physician practices also experience telemedicine enforcement in this area. For example, a psychiatrist, Dr. Anton Fry, from Danbury, Connecticut, recently agreed to pay $36,704 to settle allegations of false claims involving telemedicine services. The government alleged (based initially on a whistleblower who was a former patient) that Dr. Fry submitted improper claims to Medicare for psychiatric services that were provided over the phone to certain Medicare beneficiaries, instead of by meeting with the beneficiaries in the office and treating them in person.

What You Can Do

As more professionals turn to telemedicine, we can expect to see a lot more enforcement actions. Now is the time to get acquainted with the rules and regulations surrounding this new technology. Medicare regulations represent a national payor and that’s why it’s so important to have a thorough understanding of the Medicare system. But as compliance professionals, we must also prepare for the variations that can come in the rules for telemedicine from state to state. This is especially true for Medicaid. Similarly, each commercial payor may have their own policy on telemedicine so it’s crucial to remember to examine your major commercial payor policies.

Avoid telemedicine pitfalls by downloading this free eBrief, The Guide to Understanding Telemedicine Rules and Regulations, and learn how to stay ahead of telemedicine, rules, and regulations for Medicare, protect your organization from terrifying enforcement actions, and navigate the complexity of the originating site.