How to Spot and Avoid Telemedicine Fraud

Telemedicine companies can provide essential medical services to patients through licensed healthcare professionals via telephone communication. It has been a great innovation. Unfortunately, this innovation has been exploited by some people to commit telemedicine fraud, which is when there are fraudulent activities that use the mechanism of telehealth services for illegal financial gain or other criminal purposes. Telehealth fraud undermines the integrity of healthcare systems, wastes resources, and can harm patients by exposing them to unnecessary procedures or treatments. 

In 2022, the Office of Inspector General (OIG) at the Department of Health and Human Services released a special fraud alert, given the prevalence of this practice. This alert cautioned physicians and other practitioners to be vigilant and employ increased scrutiny before entering into agreements with telemedicine companies.

Not everyone who is charged with committing telemedicine fraud is intentionally doing so. These fraudulent telemedicine companies will contract with physicians so the physicians can order or prescribe medically unnecessary supplies or services for people recruited and solicited by telemedicine companies. In other words, a doctor might intend to do the right thing, but in the end, he or she unwittingly helps the telemedicine company commit fraud.

Even if one does not intend to commit fraud through telemedicine and unknowingly becomes a participant, they might still be on the hook, which can result in stiff penalties. Learn more about telemedicine fraud and how to identify it. 

What Is Telemedicine Fraud and Why Commit It?

Telemedicine is the practice of providing medical services remotely, typically through technology such as video calls, phone calls, or secure messaging. Some of the benefits of telemedicine are its convenience and accessibility, and telemedicine has experienced a meteoric rise. Unfortunately, the remote feature of telemedicine has made it an attractive practice that has been exploited for fraudulent purposes. Telemedicine fraud occurs when someone uses the mechanism of telemedicine to commit fraudulent activities. 

People may commit telemedicine fraud for various reasons, including financial gain, exploitation of loopholes in regulatory systems, and taking advantage of the convenience and anonymity offered by remote healthcare services. For instance, telemedicine offers a platform that can be exploited due to its remote nature. Additionally, patients utilizing telemedicine services may be more vulnerable to certain types of fraud due to factors such as limited access to in-person healthcare, technological unfamiliarity, or reliance on remote consultations.

What Are Some Examples of Telemedicine Fraud?

These are some of the main examples of telemedicine fraud, though this is not an exhaustive list.

• Billing for Services Not Provided

 It is fraudulent to submit claims for telehealth services that were never rendered to patients, just as it is fraudulent to submit claims for in-person health services that were never provided.

• Upcoding or Unbundling

This involves charging for more expensive services or breaking down services into separate billable components in order to inflate reimbursement. 

• Kickbacks and Bribery

It is illegal to offer or accept illegal payments in exchange for patient referrals or other favorable treatment.

• Identity Theft

One cannot illegally obtain patient information to bill for telehealth services without the patient’s knowledge or consent. The patient must always consent. 

• Providing Unnecessary Services

A medical professional cannot perform or order unnecessary telehealth services solely for the purpose of generating revenue, just as they cannot order unnecessary in-person services to drive up the bill.

• Falsifying Documentation

It is impermissible to fabricate medical records or documentation to support fraudulent claims for telehealth services.

How Do We Stop Telemedicine Fraud?

Authorities and healthcare organizations can work to combat telehealth fraud through regulatory measures, monitoring systems, and enforcement actions. As a healthcare provider, vigilance is crucial when dealing with potential fraudulent activities. If you receive proposals from telemedicine or marketing firms, adhere strictly to proper protocols before endorsing any type of initiative. Be cautious when you are assisting elderly or Medicare patients, and be on the lookout for red flags indicative of scams.

What Should Make You Suspicious

1. Patients are sourced and enlisted by a call center, telemarketing agency, or online platforms including the Internet, social media, or television advertisements. 
2. There is minimal or no interaction with these patients, and access to their authentic medical records is restricted or non-existent. 
3. Physician compensation is tied to the volume of items or services prescribed or ordered. 
4. The patients typically belong to Medicare or other federal health plans and lack coverage from other payors. 
5. Treatment options are often confined to a singular product or category, such as durable medical equipment, genetic testing, diabetic supplies, or prescription creams. 
6. There’s no expectation or capability to conduct patient follow-ups.

Federal Laws Violated By Telemedicine Fraud Schemes

The Anti-Kickback Statute is a federal criminal law aimed at healthcare providers who knowingly offer, pay, solicit, or receive remuneration in exchange for referrals or business involving services payable by federal healthcare programs.

The Civil Monetary Penalties Law grants the Secretary of Health and Human Services (HHS) authority to impose civil money penalties for false and fraudulent claims to federal healthcare programs. 

The False Claims Act prohibits the submission of knowingly false or fraudulent claims to the federal government for payment. Even in cases where violations occur due to lack of due diligence or reckless disregard, the False Claims Act can still apply, despite its specification of the term “knowingly.”

Note also that telemedicine rules and regulations vary by state. So, in order to be compliant with telehealth requirements, you also have to ensure that you are following the rules in the state in which you are practicing.

Contact a Telehealth Attorney

Individuals affiliated with these unethical companies, including physicians and nurse practitioners, risk damaging their reputation by association with fraudulent telemedicine companies and could face legal problems. If you’re a medical professional contemplating a telehealth job, make sure that you are aware of what to steer clear of and the potential consequences involved. A reputable telehealth attorney can help you avoid getting unintentionally entangled in a telemedicine fraud scheme.