Woman writing "Fraud Prevention" on a clear board, referring to telemedicine fraud

Telemedicine Fraud Plagues Industry Growth

Last March, during the early days of the COVID-19 pandemic, Medicare temporarily eased the telemedicine requirements for reimbursement in order to increase access to care and reserve in-office visits for the sickest patients; in this way, Americans have been able to reduce exposure to COVID-19, for both themselves and healthcare workers, while continuing to receive needed care. However, the unprecedented rapid growth of telemedicine has been accompanied by a rise in telemedicine fraud cases and abuses. Whatever the error may be, the Department of Justice (DOJ) has begun holding offenders accountable for their actions. Ultimately, the telemedicine industry and healthcare providers will find themselves under closer scrutiny in the future.

The Centers for Medicare and Medicaid Services (CMS) have reported an enormous increase in the use of this technology: In February 2020, only 0.1% of primary care visits involved telemedicine; that figure soared to 43% by April due to the eased restrictions implemented in March. Unfortunately, reducing rules and requirements in any industry often translates into less thorough oversight of the services being used. Whenever this happens, the potential for fraud and abuse rises, including both deliberate actions and unintentional mistakes in billing or coding.

This autumn, under the 2020 National Health Care Fraud and Opioid Takedown, the DOJ revealed significant telemedicine fraud and charged 86 medical workers in 19 judicial districts with submitting a combined $4.5 billion in false and fraudulent claims to private insurers and federal health care programs. Generally, CMS looks for indicators of possible abuse such as:

  • Misrepresenting the services provided – Providers must use the appropriate billing codes for different types of interactions ranging from telephone visits to live video visits.
  • Up-coding – Inflating the time spent with the patient via telemedicine or the complexity of the services rendered could trigger the False Claims Act.
  • Billing for services not rendered – Providers can only bill for services that were actually rendered in full; for instance, if technical difficulties prevent effective use of a service, then the provider cannot request reimbursement for that service.
  • Kickbacks – Suspicious marketing tactics have been used to contact beneficiaries unsolicitedly to generate interest in their product or service, leading to unnecessary prescriptions or referrals such as durable medical equipment or genetic testing.

To guard against telemedicine fraud and preserve the integrity of the telemedicine process, the DOJ has assembled a National Rapid Response Strike Force to monitor major health care providers that employ this technology in multiple jurisdictions. The DOJ opened investigations of telemedicine misuse long before the COVID-19 pandemic began, and the recent announcements of fraud charges—the events of which actually occurred before the pandemic—suggest that the DOJ will only tighten surveillance in the future. Likewise, CMS is expanding its reviews of telemedicine visits, looking for suspicious patterns such as billing for more visits than can be possible in one day or billing for genetic testing that affects all fifty states.

Moving forward, providers and telemedicine companies should keep abreast of quickly-changing regulations and adjust for compliance as needed. The following actions can help reduce enforcement risk:

  • Perform more thorough background checks and potential conflicts when hiring staff and considering potential vendors
  • Before acting, consider whether a telemedicine service or referral is appropriate, necessary, and safe for the patient
  • Retain more thorough documentation, stored in an easily accessible manner in case a subpoena is issued
  • Train staff more carefully on compliance policies, including billing and coding
  • Monitor your own bills and charts to identify any patterns or outliers
  • Perform frequent audits to confirm that your facility and staff are compliant
  • Investigate and report suspected noncompliant behavior; the onus is on the telemedicine companies to be able to respond immediately to questions of noncompliant behavior
  • Consult an attorney about questionable arrangements or unethical behaviors, whether in the past or present

This DOJ action indicates that federal regulators will likely inspect future requests for reimbursement more carefully from both telemedicine companies and health care facilities. Taking proactive steps like those listed above can help your organization ensure that no actions or behaviors could be perceived as abuse or fraud while strengthening compliance.

To learn more about telemedicine fraud, visit:

“Early Impact of CMS Expansion of Medicare Telehealth during COVID-19” at Health Affairs

“DOJ Focuses on Health Care Fraud Schemes Involving Telemedicine & Health Care Facilities” at Lexology

“Lessons Learned in the Early Days of Telemedicine Prosecutions: Practical Tips for Defendants Facing Indictments” at JD Supra

“Fraud Emerges as Telemedicine Surges: Compliance Guidance for Telemedicine Providers” at JD Supra

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