Many schemes involve allegations of orders or prescriptions for medically unnecessary DME, genetic testing, wound care, or prescriptions for medication, each resulting in reimbursement from a Federal health care program.
On July 20, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) released its first Special Fraud alert since November 16, 2020 (here) (the “Alert”). The most recent Alert encourages practitioners “to exercise caution and use heightened scrutiny when entering into arrangements with Telemedicine Companies” exhibiting certain “red flags,” and to perform sufficient due diligence to avoid potential violations of criminal, civil, and administrative law. The Alert, which coincided with the announcement by the U.S. Department of Justice (“DOJ”) the same day of a national operation charging several dozen defendants in connection with a $1.2 billion telemedicine fraud (here), nonetheless recognizes and reaffirms the value and need for bona fide telehealth services. Below we offer some thoughts on the Alert, as well as lessons from our own experience defending healthcare providers under investigation for telemedicine fraud.
DOJ’s and HHS-OIG’s efforts to date
The Alert notes the OIG “has conducted dozens of investigations of fraud schemes involving companies that purported to provide telehealth, telemedicine, or telemarketing services . . . and exploited the growing acceptance and use of telehealth.” These initiatives have included, for example, “Operation Brace Yourself” in 2019, which involves charges against 24 defendants and losses of over $1.2 billion (here), and, as noted above, the announcement just last week of criminal charges against 36 defendants in 13 different federal districts again alleging $1.2 billion in fraudulent telemedicine, clinical laboratory and durable medical equipment (“DME”) arrangements, including what the government says are “some of the first prosecutions in the nation related to fraudulent cardiovascular genetic testing, a burgeoning scheme.” (here). These are just two of the initiatives in recent years that, by DOJ’s estimation, have involved over $8 billion in fraud (here).
Although telemedicine schemes vary, the Alert identifies some frequently recurring elements. For example, many schemes involve allegations of orders or prescriptions for medically unnecessary DME, genetic testing, wound care, or prescriptions for medication, each resulting in reimbursement from a Federal health care program. The arrangements have also included domestic or international call centers, staffing companies, and marketers or brokers. Invariably, the arrangements require limited or no direct engagement by the affected practitioner with the patient allegedly in need of the DME, testing, care, or prescription, and no direct access to the patient’s medical record. In some instances, a practitioner may only be provided an intake form, ostensibly completed by another healthcare professional, but possibly in fact completed by a telemarketing representative. Frequently, the practitioner is paid on a volume basis, such as for each prescription written, perhaps characterized as payment “per review, audit, consult, or assessment of medical charts.”
The government’s concerns with these arrangements are several: (1) they result in Federal health programs (e.g., Medicare and Medicaid, among others) paying for medically unnecessary items and services; (2) beneficiaries themselves receive medically unnecessary or even harmful care; and (3) the integrity and independence of medical decision making is compromised.
Accordingly, the Alert identifies seven potential “red flags” that healthcare providers should bear in mind, while noting that the list is illustrative, not exhaustive, and that the absence of any particular red flag will not serve as a defense, given the totality of the circumstances analysis the government will undertake:
Finally, the Alert notes that this latest guidance “is not intended to discourage legitimate telehealth arrangements,” consistent with prior HHS-OIG statements. At the same, those acting outside the scope of legitimate conduct face serious criminal, civil, or administrative exposure (including exclusion from Federal health programs).
Tips for providers
How then, should a provider distinguish between bona fide telehealth arrangements and those that could result in serious penalties and collateral consequences? In addition to the helpful HHS-OIG guidance, providers should:
Hard working providers, frequently with the burdens of education debt and other expenses, may be easily targeted and duped by unscrupulous actors. But it remains the case that there is no such thing as “easy money,” and the hint of “easy money” should itself serve to forewarn. Providers who unknowingly enter into illegal arrangements or who do not conduct necessary due diligence face criminal, civil, and administrative exposure.But by acting with caution, asking the proper questions, and sharing all relevant facts with their own experienced counsel to obtain the full benefit of independent review, providers should be able to distinguish between the promise of genuine telehealth that helps patients gain healthcare access necessary to obtain medically necessary care, and a fraudulent mirage.
Bruce D. Armon, a Partner and Chair in the Healthcare Practice at Saul Ewing Arnstein & Lehr, counsels clients on how federal and state health care laws affect health care providers and businesses.
Justin C. Danilewitz, a Partner in the White Collar and Government Enforcement Practice at Saul Ewing Arnstein & Lehr, is a former Assistant U.S. Attorney who represents physicians and practice groups in government investigations.
 The last alert related to Speaker Programs
 On February 26, 2021, HHS-OIG Principal Deputy Inspector General Christi A. Grimm issued a statement—against the backdrop of the COVID epidemic, noting that “[w]here telehealth and other remote access technologies were once a matter of convenience, the public health emergency made them a matter of safety for many beneficiaries,” and “[i]n some cases, health care providers needed regulatory flexibility to provide safe and effective care remotely during the ongoing pandemic.”See Statement of Principal Deputy Inspector General Grimm on Telehealth (February 26, 2021), available at https://oig.hhs.gov/coronavirus/letter-grimm-02262021.asp (last visited July 25, 2022). The statement recognized “that telehealth can be an important tool to improve patient access to behavioral health services,” and that “OIG recognizes the promise that telehealth and other digital health technologies have for improving care coordination and health outcomes.”Id.