To facilitate the delivery of care during the pandemic, the federal government and many state governments have enacted changes that have encouraged physicians and other non-physician practitioners (collectively, practitioners) to use telehealth services. While this new flexibility has increased access to care, it has also increased opportunities for fraud. On July 20, 2022, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a Special Fraud Alert warning practitioners of possible fraudulent telemedicine contracts ( Fraud alert).

The fraud alert stems from lessons learned from the OIG’s coordinated action with the Department of Justice (DOJ) and other agencies that resulted in criminal charges against 36 defendants involving more than $1.2 billion dollars of fraudulent telemarketing services identified as telehealth. The fraud alert highlights these common themes in telehealth agreements that caught the attention of OIG and DOJ investigators:

  1. Recruitment of patients. Patients have been identified or recruited by telemedicine companies involving a telemarketer, recruiter, patient broker, call center, or internet, television, or social media advertisement of free items or services or at low cost. The fraud alert mentioned cases in which Medicare beneficiaries complained of being “bombarded” by overseas telemarketing calls offering, for example, “free” braces.
  2. Insufficient doctor-patient contact. No practitioner has ever examined or “significantly evaluated” the patients for whom these items or services were prescribed to determine their medical necessity. For example, the use of audio-only technology, regardless of patient preference and without the ability to use other telehealth modalities, was deemed suspicious. Additionally, medical records that included only demographic information or a predetermined pattern of medical history were of concern to investigators. Medical records must contain “sufficient clinical information to inform the practitioner’s medical decision-making.” The fraud alert mentioned a case in which a nurse practitioner admitted to spending an average of 18 seconds from the time he opened a patient’s record containing pre-written commands (sometimes for several types of devices orthopedics) until his execution of the order.
  3. Remuneration formula. Investigators ruled the dubious charges based on the number of purported medical records reviewed, rather than a practitioner’s diagnosis and determination of treatment. The fraud alert noted several instances where practitioners were not paid for the time, skill and effort required to assess patient records or communicate with the patient, but instead were paid per order than they signed up for a particular item or service, regardless of medical necessity.
  4. Limitation to Certain Payers. Many contracts were limited to the supply of items and services to recipients of the federal health care program; no other payer insurance was accepted. Likewise, efforts to do the opposite — exclude recipients from the federal health care program — have raised concerns.
  5. Limitations on Items or Services. Restricting a Practitioner’s treatment options is considered suspicious. Thus, supplying a single product or a single class of products (g., genetic testing, diabetic supplies, prescription creams, or EMR type devices) suggests that the practitioner is not evaluating a patient for the better treatment option, but rather for a specific possibility of treatment. The fraud alert mentions a case in which a nurse practitioner ordered 3,000 braces for patients she never interacted with, including a knee brace for an amputee and a back brace for a deceased patient.
  6. Lack of follow-up. The absence of any anticipated follow-up could signal that the contract involves fraud and abuse. The fraud alert specifically identified ordering genetic tests without any planned follow-up to discuss test results as an example of concerning conduct.

Notably, telehealth represents a great expansion of access to and affordability of health services. These virtual options save patients time and money; reduce patient transfers, visits to emergency rooms and emergency centres; and provide savings to payers. However, practitioners should be aware of the potential for abuse. The Fraud Alert reminds practitioners that engaging in these problematic contracts could expose them to criminal, civil, or administrative liability under various federal and state fraud and abuse laws. Practitioners should consult with health care advisors familiar with these regulatory issues when considering or negotiating telehealth contracts.