HHS warns physicians about what to look for in telehealth fraud

Clues point to illegal kickbacks and schemes that put practitioners and patients at risk.

Physicians engaging in telehealth services should look for clues that indicate illegal fraud schemes, according to the U.S. Department of Health and Human Services (HHS).

Use of telehealth services exploded during the COVID-19 pandemic and many physicians used it appropriately to treat patients, said the special fraud alert published this month, the HHS Office of the Inspector General (OIG).

However, physicians and other practitioners should use heightened scrutiny, exercise caution, and consider suspect criteria before entering into agreements with telehealth companies, because both telehealth companies and practitioners are liable in illegal kickback schemes, the OIG said.

The special fraud alert comes on the heels of the OIG’s annual report that federal investigators netted a record $5 billion in health care fraud judgments and settlements in the year. That report was published this month and about two weeks later, the U.S. Department of Justice, with HHS and the Centers for Medicare & Medicaid Services, announced new allegations of medical fraud tallying more than $1.2 billion by 36 defendants across the country.

Illegal kickbacks

Generally, telehealth companies have used kickbacks to recruit and reward physicians and other practitioners in fraudulent schemes. The companies may pay physicians to order or prescribe items or services for patients with whom the practitioners have limited, if any, interaction, and without regard to medical necessity, the OIG warning said.

Fraudsters may tell physicians they do not need to contact patients, or only need to speak to them by telephone, and physicians do not get to review patients’ real medical records, according to OIG.

That can lead to considerable harm, such as:

  • An inappropriate increase in costs to federal health care programs for medically unnecessary items and services that, in some cases, a beneficiary never receives
  • Potential harm to patients by providing unnecessary care, items that could harm patients, or delaying needed care
  • Corruption of medical decision-making

There are a number of federal criminal, civil and administrative laws prohibiting such conduct. The federal antikickback statue is a criminal law that prohibits soliciting, receiving, offering, or paying for referrals, orders, items or services reimbursable by a federal health care program.

What to look for

OIG provided examples of characteristics that could suggest a telehealth-practitioner arrangement has risk of fraud and abuse:

  • Patients were identified or recruited by the telehealth company, a telemarketing company, sales agent, recruiter, call center, health fair or through the Internet, television, or social media advertising for free or low-cost items of services.
  • Practitioners don’t have sufficient contact or information from purported patients to assess the medical necessity of items or services ordered or prescribed.
  • The telehealth company compensates practitioners based on volume of items or services, including compensation based on the number of purported medical records that practitioners review.
  • The telehealth company only furnishes items and services to federal health care program beneficiaries.
  • The telehealth company claims to furnish items and services only to patients not in federal health care programs, but in fact bills federal health care programs.
  • The telehealth company furnishes only one product or a single class of products, potentially restricting practitioners’ treating options. Examples may include durable medical equipment, genetic testing, diabetic supplies or various prescription creams.
  • The telehealth company does not expect practitioners to follow up with patients and does not supply follow up information.

Anyone with information about practitioners, telemedicine companies, or other individuals or entities engaging in any ofthe activities described above, please contact the OIG Hotline at https://oig.hhs.gov/fraud/reportfraud or by phone at 1-800-447-8477 (1-800-HHS-TIPS).