Telemedicine in the Justice Department’s cross-hairs

April 8, 2019

Given the increased utilization of telemedicine, federal prosecutors and regulators are beginning to take note.

The last few years have seen an explosive growth of telemedicine. Some estimates peg the global telemedicine technologies market, including hardware, software, and services, at nearly $40 billion in 2018. Incredibly, this market is projected to grow by 18 percent annually over the next six years, reaching $103 billion in 2024. And large institutions are noticing-more than three out of four hospitals and health systems have in place (or are planning to implement) telemedicine programs.

Given the increased utilization of telemedicine, federal prosecutors and regulators are beginning to take note. Here, we set out some recent trends by prosecutors and offer practical advice for those companies and individuals entering the telemedicine space. 

Legal developments

The first significant development in the telemedicine enforcement space came in April 2018, when the Department of Health and Human Services Office of Inspector General (HHS-OIG), issued a report entitled “CMS Paid Practitioners for Telehealth Services that did not Meet Medicare Requirements.” As its title suggests, the report took issue with telemedicine providers and noted that upwards of one-third of all telemedicine claims are improper.  

The HHS-OIG report identified five specific indicators that telemedicine services were potentially problematic:

• Claims where the beneficiaries received services at non-rural originating sites (currently, Medicare only covers telemedicine claims where the beneficiary is in a rural site);

• Claims billed by ineligible institutional providers (Medicare limits those who may properly bill for telemedicine);

• Claims were for services provided by an unallowable means of communication (Medicare requires two-way audio and visual communications);

• Claims were for a non-covered service (there are only a limited range of services currently covered); and

• Claims were for services provided by a physician located outside the United States.

These practices will be red flags for suspicious telemedicine services requiring government enforcement efforts, so providers should take care to avoid them. 

On the heels of that report, the Department of Justice announced an indictment in Tennessee linked to a “billion-dollar telemedicine fraud conspiracy.” According to the indictment, the defendants set up an elaborate telemedicine scheme in which a telemedicine company “fraudulently solicited insurance coverage information and prescriptions from consumers across the country.”  The government specifically took issue with the telemedicine company allegedly selling pharmaceutical products at increased, marked-up prices, allegedly “concocting” information about the efficacy of products, and purportedly creating an “intentionally deficient customer service designed to stall consumer complaints.”  

And, finally, in December, the U.S. Attorney’s Office in Utah announced a multimillion False Claims Act settlement. The United States alleged that the company violated Medicare’s prohibition against telephone solicitation of covered products to beneficiaries.

Best practices

In light of this enhanced enforcement scrutiny and the continuing development of the regulatory landscape, providers interested in telemedicine should err on the side of caution and implement the following practical recommendations.

Ensure patients are telemedicine eligible.  Medicare only reimburses for care in the telemedicine setting when the patients receiving care are in rural settings (or otherwise meet other specific criteria). Carefully scrutinize your patients’ demographics and current location. Only bill for those services that meet eligibility requirements.

Offer telemedicine services at a qualified site.  Telehealth services must be furnished to a beneficiary at an eligible originating site, which is one of the following: the office of a practitioner, a hospital, a critical access hospital (CAH), a rural health clinic, a federally qualified health center, a hospital-based or CAH-based renal dialysis center, a skilled nursing facility, or a community mental health center (42 CFR § 410.78(b)(3)). Note that independent renal dialysis facilities are not eligible originating sites.  

Use approved communications equipment.  In general, practitioners must provide telehealth services using an interactive telecommunications system (42 CFR § 410.78(b)). Generally, interactive telecommunications systems do not include telephone, fax, or email (42 CFR § 410.78(a)(3)). These interactive communication systems must allow real-time communication with both audio and video between the beneficiary and the practitioner.

Be mindful of Medicare’s anti-solicitation provisions.  In general, Medicare bans unsolicited calls to Medicare beneficiaries (or potential beneficiaries). Therefore, make sure you are calling only on those that have opted-in to receive telemedicine calls.  While there have been some loosening restrictions-e.g., agents may now send unsolicited emails to potential beneficiaries if there is an opt-out option-these loosening restrictions do not apply to telephone calls. Therefore, obtaining-and documenting-patient consent is critical.

Document, document, document (and record)!  Most healthcare practitioners know by now that files need to be documented thoroughly to withstand audits and scrutiny. So too in the telemedicine context. A best practice is to invest in recording of phone calls. This is often a telemedicine company’s best line of defense in rebutting patient complaints and other allegations.  With the rapidly decreasing costs associated with this technology, recording of calls will likely be the new baseline expectation.

Ultimately, no precautions will inoculate a telemedicine provider from scrutiny. As the government spends more and more money on telemedicine, increased enforcement is likely to be the norm. As the old adage goes, an ounce of prevention is worth a pound of cure.  Nowhere is this adage more true in the evolving world of telemedicine.   

A. Lee Bentley, III, is the former U.S. Attorney for the Middle District of Florida. Jason Mehta is a former federal prosecutor in the same office.  While serving as U.S. Attorney, Mr. Bentley’s office recovered more than $1.8 billion in healthcare fines and penalties.  Mr. Mehta personally recovered nearly a quarter of a billion dollars in fines and penalties.  Mr. Bentley and Mr. Mehta now are partners with the Tampa, Fla., office of Bradley Arant Boult Cummings LLP. They advise companies and individuals facing government inquiries and investigations. Mr. Bentley can be reached at lbentley@bradley.com. Mr. Mehta can be reached at jmehta@bradley.com.

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