The recent increase in the use of telehealth as a modality of care has been significant for patients and providers, with significant public health benefits. However, with the growing acceptance of virtual care by the general public, the Office of Inspector General (OIG) of the US Department of Health and Human Services, the Department of Justice (DOJ) and other federal regulators have also strengthened the fight against fraud in this area, in particular through the recent publication of the OIG Special Fraud Alert (SFA).

The proliferation of telehealth services during the COVID-19 pandemic has heightened government oversight in this area, although many enforcement actions have also targeted pre-pandemic behaviors. Specifically, the DOJ has focused its enforcement on purported telemedicine companies hiring physicians to perform minimal encounters and prescribe medically unnecessary durable medical equipment (DME), prescription creams, diabetic supplies, or laboratory services and genetic tests that are ultimately billed to government payers, including Medicare. and Medicaid. On July 20, 2022, DOJ announced charges against 36 defendants across the United States, alleging fraudulent schemes totaling more than $1.2 billion. Together with the DOJ, BIG issued the SFA outlining suspicious characteristics of alleged telemedicine companies engaged in such fraudulent schemes.

The SFA describes a common pattern in which so-called “telemedicine companies” craft deals with unscrupulous or unwitting clinicians to order or prescribe items and services based on limited interactions and regardless of medical necessity. Some of these arrangements involve these fraudulent actors asking clinicians to prescribe pre-selected items or services, while other arrangements do not allow clinicians to review legitimate patient medical records before making a prescribing decision.

In the SFA, the OIG identifies a non-exhaustive list of seven “suspicious characteristics” that suggest an increased risk of fraud and abuse, including the following:

  • Patients are identified and recruited through call centers, health fairs, recruiters, telemarketing channels or social media advertising free or low cost items or services.
  • Lack of sufficient contact with patients to assess the medical necessity of prescribed items or services.
  • Compensation based on volumes of items or services ordered or prescribed.
  • Refusal to accept insurance from payors not affiliated with federal health care programs.
  • Misrepresentation of whether the company actually bills federal health care programs.
  • Predetermine or limit the types of products or services that clinicians can prescribe, such as limiting prescriptions to certain EMRs or topical creams.
  • Do not expect, allow or require clinicians to follow up on patients.

The SFA is an important tool for distinguishing between legitimate telehealth models and potentially fraudulent telemarketing companies claiming to sell health products. Although the OIG does not acknowledge it, there are clear distinctions between genuine telehealth providers and bogus operations that only do telemarketing. Especially as more telehealth providers participate in federal health care programs and as Medicare and Medicaid cover more service modalities, including audio-only encounters and store-and-forward services, providers telehealth professionals will need to use a variety of tools to provide care. While this can create efficiencies, especially in conjunction with value-based care programs, it also increases the risk that telehealth platforms will come under scrutiny from the OIG and the DOJ.

In anticipation of law enforcement and whistleblower activities that will attempt to take advantage of the SFA, telehealth providers should reassess their operations and compliance activities with respect to the provision of services or the ordering of products, tests and prescription drugs. In particular, telehealth providers should assess the types of items or services included in formularies, “do not prescribe” lists and other prescribing policies, monitor the duration of patient encounters, and implement controls, such as peer audits or quality assurance committees, to ensure that prescribed items and services are medically necessary.

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