OIG Special Fraud Alert – Telehealth


Telehealth utilization drastically increased during the COVID-19 pandemic. Telehealth fraud dramatically increased too. On July 20, 2022, HHS’ OIG and the Department of Justice (DOJ) announced criminal charges against 36 telehealth companies totaling $1.2 billion for telehealth fraud that they look to recover. 

To help combat this growing problem and support providers, the OIG published a new Special Fraud Alert about arrangements with telemedicine companies. The alert includes seven suspect characteristics that providers should consider with a telehealth arrangement to reduce their risk of committing healthcare fraud and abuse.   

Behind the Headlines


During the COVID-19 pandemic, Congress, HHS and CMS increased flexibility covering various types of services delivered via telehealth for nearly 150 million federal health program beneficiaries. But with expansion came greater fraud and abuse opportunities.  

As a result, the OIG in partnership with the DOJ have criminally charged 36 defendants for fraudulent healthcare schemes, including telemedicine, clinical laboratory and durable medical equipment (DME), totaling $1.2 billion in losses.  

The OIG issued a Special Fraud Alert that was prompted by 52 investigations into fraud schemes. They involve companies that claimed to provide telehealth, telemedicine or telemarketing services. Instead, these companies allegedly engaged in kickbacks to providers to further their schemes, which included medically unnecessary orders. To help prevent even bigger losses from occurring, CMS will continue to closely monitor telehealth activity for fraud and abuse. 

OIG Special Fraud Alert Provider Guidance 

The OIG’s Special Fraud Alert aims to help providers avoid telehealth schemes. In their guidance, they emphasize concerns with telehealth arrangements that could increase spending for federal healthcare programs and beneficiaries and potentially cause harm to patients and medical decision-making.  

Seven Potential Characteristics of a Fraudulent Telehealth Arrangement: 

  1. Questionable patient recruitment practices: The patients for whom the medical provider orders or prescribes items or services were identified or recruited by a telemedicine company, telemarketing company, sales agent, recruiter, call center, health fair, internet, television or social media and they are offering free or low out-of-pocket cost items or services. 
  2. No patient contact or interaction: The medical provider does not have sufficient contact with or information from the patient to meaningfully assess the medical necessity of the items or services ordered or prescribed. 
  3. Compensation based on volume: The telemedicine company compensates the provider based on the volume of items or services ordered or prescribed, which may be characterized to the provider as compensation based on the number of purported medical records that the provider reviewed. 
  4. Services only include federal payors: The telemedicine company only furnishes items and services to federal healthcare program beneficiaries and does not accept insurance from any other payor. 
  5. Services exclude federal payors: The telemedicine company overtly claims to only furnish items and services to commercially insured or self-pay individuals and not federal healthcare program beneficiaries but may in fact bill federal payors. 
  6. Treatment restriction: The telemedicine company only furnishes one product or a single class of products (e.g., DME, genetic testing, diabetic supplies, various prescription creams), potentially restricting a provider’s treating options to a predetermined course of treatment. 
  7. No follow-up care required: The telemedicine company does not expect providers to follow up with patients or provide the information required for follow up (e.g., the telemedicine company does not require providers to discuss testing results with each patient). 

Keep on Your Radar 

The OIG encourages providers to exercise caution and use heightened scrutiny when they consider arrangements with telehealth companies that contain one or more of the listed characteristics.  

Stay Alert – A Telefraud Example 

  1. Telemarketers contact beneficiaries asking for healthcare information including their insurance ID info.
  2. Information is shared with a so-called telehealth company who pays a medical provider to electronically sign orders or prescriptions in an online portal for unnecessary testing, DME and prescription medications – and no patient interaction or treatment occurs.
  3. Orders are then sent to the DME, lab or pharmacy company for processing, which results in submission of a false claim intending to receive payment from Medicare, Medicaid and other federal healthcare programs.  

If you suspect fraud, you can contact the OIG; click here to learn more