The seven signs of telehealth fraud

The Department of Health and Human Services Office of Inspector General (OIG) recently endorsed the adoption of pandemic expansions of telehealth into permanent policy, noting that 40 percent of Medicare beneficiaries used telehealth in the first year of the public health emergency. However, an earlier OIG report laid bare a key obstacle to the permanent expansion of telehealth flexibility: Fraud.

The OIG’s Special Fraud Alert was released July 20—the same day the Department of Justice (DOJ) announced charges against 36 defendants for more than $1 billion in telehealth fraud and related charges. The most common type of case involved kickbacks for ordering cardiovascular tests, genetic tests or durable medical equipment without any sort of patient interaction.

“These types of volume-based fees not only implicate and potentially violate the Federal anti-kickback statute, but they also may corrupt medical decision-making, drive inappropriate utilization, and result in patient harm,” the OIG said in its report.

All told, the DOJ has uncovered more than $8 billion in fraud related to telehealth since 2019. This represents a small portion of total fraud across healthcare—estimated to exceed $300 billion annually, according to the National Health Care Anti-Fraud Association—but it’s enough to give federal lawmakers pause as they consider legislation (H.R. 4040) to keep telehealth waivers in place through the end of 2024.

The bill passed the House in late July and is before the Senate Finance Committee. This gives Congress a narrow window to act; signs point to the public health emergency expiring in October, and telehealth flexibilities are due to expire 151 days after that.

Hard data on the exact scale of telehealth fraud is scarce, though an OIG report on telehealth fraud risks due later this fall should provide insight, according to Politico.

In the meantime, OIG offered healthcare organizations seven warning signs that a telehealth provider poses a risk of fraud and abuse:

• The health system is ordering services for patients that the telehealth provider recruited by advertising free or low-cost services.
• The health system has limited contact with the patient to determine whether items being ordered are medically necessary.
• The telemedicine provider pays the health system based on the volume of items ordered.
• The provider only works with Medicare beneficiaries and doesn’t accept commercial insurance or Medicaid.
• The provider claims to order services only for individuals not covered by Medicare but still bills Medicare.
• The provider only orders a single class of medical products or services, restricting the health system to a “predetermined course of treatment.”
• The provider doesn’t give the health system its patients’ contact information or otherwise indicate that it expects the health system to follow up with patients.

“Practitioners who enter into arrangements with telemedicine companies in which one or more of these suspect characteristics are present should exercise care and may face criminal, civil, or administrative liability depending on the facts and circumstances,” OIG noted.

Brian Eastwood is a Boston-based writer with more than 10 years of experience covering healthcare IT and healthcare delivery. He also writes about enterprise IT, consumer technology, and corporate leadership.