Eye on Enforcement / How to Mitigate Risks of Telehealth Fraud and Abuse

Rebecca Stitt-Laugherty 

Snapshot 

In response to numerous recent telehealth fraud and abuse investigations, the OIG issued a Special Fraud Alert warning practitioners to exercise caution around their arrangements with telemedicine companies. Telehealth fraud and abuse could result in both civil and criminal liability for providers under the Federal Anti-Kickback Statute and the False Claims Act, among other federal laws.  

Providers should learn from recent convictions to reduce their risk of committing telehealth fraud and abuse as federal oversight is expected to continue. 

Three Telehealth Fraud Convictions Cost Providers $20M

Below is a summary of three government investigations that resulted in the conviction, sentencing and the subsequent restitution totaling nearly $20 million from fraud and abuse. 

Investigation 1: Georgia Nurse Practitioner Convicted in Telemedicine Fraud Scheme Totaling Over $3 Million

A nurse practitioner (NP) facilitated orders for more than 3,000 orthotic braces generating over $3 million in fraudulent or excessive charges to Medicare. First, telemarketing companies captured the identities of senior citizens, identified through a telemarketing scheme, and bundled that information as “leads.” Next, the NP took the leads, signed her name to newly created fake patients’ medical records falsely claiming they provided examinations and then created orders for durable medical equipment (DME) such as orthotic braces for patients they never met or spoke with – including a knee brace for an amputee and a back brace for a recently deceased patient – in exchange for money. The NP’s fraudulent orders were then sold to DME companies that would generate reimbursement from Medicare. 

As a result of the investigation, the NP was convicted on charges of an illegal kickback conspiracy and five counts each of healthcare fraud, false statements related to healthcare and aggravated identity theft. The NP was sentenced to 87 months in federal prison and was ordered to pay more than $1.6 million in restitution for their role in the fraud scheme. 

Investigation 2: Ongoing Western District of Michigan Criminal and Civil Enforcement Action for Fraud Totaling Over $7 Million

Marketers called Medicare beneficiaries soliciting them for medically unnecessary braces and cancer genetic testing for screening purposes. The marketers then paid medical practitioners to purportedly review and sign these orders under the guise of telemedicine and sold those signed orders to the owners of the DME companies and genetic testing laboratories in violation of the Federal Anti-Kickback Statute. 

Through the ongoing investigation, dubbed Operation “Happy Clickers,” a series of criminal and civil enforcement actions were taken against the medical practitioners who signed off on the illegitimate orders resulting in $7.3 million of alleged Medicare fraud losses.  

One practitioner was sentenced to 21 months in federal prison followed by three years of supervised release and repayment of $5.7 million to Medicare. The other three practitioners entered into civil settlements agreeing to repay a total of $371,685 to resolve their liability. 

Investigation 3: Two Montana Nurse Practitioners Admit to Telehealth Scheme Totaling Over $9 Million

One Montana NP allegedly worked with certain staffing and telemedicine companies to receive money to sign unnecessary brace orders for Medicare beneficiaries regardless of medical necessity, often without ever talking to them. For the orders signed during this period, Medicare paid approximately $5.1 million and the NP was paid at least $124,900. 

Another Montana NP allegedly worked with certain staffing and telemedicine companies to receive money to sign brace orders that were prepared by telemarketers who had no medical training or certification. The NP routinely signed these orders for Medicare beneficiaries regardless of medical necessity. For the orders signed during this period, Medicare paid approximately $4.3 million and the NP was paid at least $94,395. 

As a result of the investigations, the two NPs were sentenced for conspiring to defraud Medicare of millions of dollars. The first NP was sentenced to nine months and ordered to pay more than $5 million in restitution. The second NP was sentenced to 12 months in federal prison and ordered to pay more than $4.3 million in restitution. Both will be placed on supervised release for three years after their release.  

Lessons Learned

Risk Areas: 

  1. Up-coding: Do not inflate the time spent providing telemedicine services or the complexity of the services.   
  1. Misrepresenting the virtual service(s) provided: Understand the requirements for each type of telehealth interaction, which CPT codes apply, and how to bill for them. 
  1. Billing for services not rendered: Do not submit claims for services not provided, or not provided effectively (i.e., poor internet connection). 
  1. Kickbacks: Be aware of kickback scenarios. Recent examples include marketing tactics to make unsolicited contact with Medicare beneficiaries resulting in prescribing or referring them for unnecessary testing, prescriptions or DME for which the providers received kickbacks.  

Tips to Mitigate Risks: 

  1. Run comprehensive background and conflict checks on new employees and contractors to check for past illegal or unethical behavior. Hiring or contracting with someone who accepted kickbacks or is involved in inappropriate referral arrangements could bring Anti-Kickback Statute liability on an otherwise compliant company. 
  1. Provide regular training on providing telemedicine services as well as how to appropriately code and bill for those services. 
  1. Closely monitor charts and claims for patterns and outliers. If potential issues are spotted, evaluate whether the services and billing are appropriate. If issues are found, implement measures to prevent future occurrences. 
  1. Encourage and provide ways to report suspected noncompliant behavior. Conduct appropriate investigations into any allegations received. 

Taking proactive steps like the ones described above can help your organization ensure that its actions and behaviors will not be perceived as abuse or fraud. If you suspect fraud or abuse, contact the OIG; click here to learn more

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