HIGH ALERT FOR TELEHEALTH – PART TWO: A Highlight Reel of Recent OIG Enforcement Actions and Outcomes

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As we shared in Part One on this topic [link], in late July of this year the Department of Health and Human Services Office of Inspector General (OIG) released a Special Fraud Alert regarding “Telemedicine Companies”^[1] that addressed problematic arrangements leading to a material incidence of fraud following dozens of fraud investigations in the last two years. In this Part Two, we highlight a few of the recently announced criminal cases initiated by the OIG that are said to have resulted in more than $1.2 billion in losses to the federal government—all primarily involving allegations of bribery and illegal kickbacks with Telemedicine Companies.

The telemedicine industry has exploded in recent years, primarily as a result of the changes to healthcare delivery models necessitated by the coronavirus pandemic. One of only six such communications in nearly 20 years,^[2] the OIG’s latest Special Fraud Alert is connected to its announced collaboration with the United States Department of Justice (DOJ) to combat the troubling incidences of telemedicine fraud. On July 20, 2022, the DOJ announced federal charges against 36 criminal defendants in 13 different districts for healthcare fraud violations involving, primarily, alleged bribery and illegal kickbacks between Telemedicine Companies and physicians.^[3] The nationwide coordinated effort also included participation from the Federal Bureau of Investigation, the Centers for Medicaid and Medicare Services (CMS), the Internal Revenue Service, and other federal and state law enforcement agencies. The losses to the federal government resulting from the fraudulent telemedicine schemes are claimed to be in excess of $1.2 billion, with more than $8 million having been seized in connection with the investigation. CMS separately announced administrative actions against 52 healthcare providers allegedly involved in similar schemes.

Now for the highlights:

• The owner of multiple laboratories has been indicted by a federal grand jury in Louisiana for an allegedly fraudulent scheme involving bribes and kickbacks paid to purported marketers, call centers, and telemedicine companies in order to solicit patients for cardiovascular and genetic testing at no cost to them and to obtain doctor’s orders for such testing regardless of whether the tests were medically necessary. According to the indictment, the owner and other co-defendants then submitted more than $174 million in false claims to Medicare for these unnecessary medical tests and equipment. The indictment is available here.

• A federal grand jury in Florida indicted two individuals who owned and operated a network of companies that marketed and supplied durable medical equipment (DME) for an allegedly fraudulent scheme involving kickbacks and bribes to recruiters in exchange for the referral of patients and physician orders for DME orders for Medicare beneficiaries. The indictment alleges these orders were also false and fabricated in that there was no physician/patient relationship and the DME was not medically necessary and resulted in fraudulent bills to Medicare of over $1.7 million. The indictment is available here.

• A Georgia owner and operator of multiple DME companies that provided orthotic braces to patients, including Medicare beneficiaries, has also been charged with participating in a scheme of fraud involving DME and paid telemarking companies. In his case, the defendants allegedly obtained Medicare beneficiary information from international call centers, packaged as “leads,” which they then used to call the beneficiaries and get them to accept braces, often medically unnecessary, that they marketed as free or low-cost. The defendants then paid for completed doctors’ orders for DME, which led to approximately $6 million billed to Medicare that resulted in just under $4 million in reimbursement. The information is available here.

• A specific focus on fraudulent schemes involving cardiovascular genetic testing has led to indictments such as one in Florida charging conspiracy to receive health care kickbacks whereby the defendant and his co-conspirators, all marketers, solicited and received kickbacks and bribes from laboratories in exchange for referral of Medicare beneficiaries for cardiovascular genetic testing. The scheme resulted in approximately $3.4 million in claims to Medicare and allegedly $1.4 million in remuneration to the conspirators. The indictment is available here.

• The owner of Medicare-enrolled laboratories in Texas and California has also been indicted on charges involving false claim submissions for cardiovascular genetic testing obtained through kickbacks and bribes to telemarketing companies. The false claims to Medicare are alleged to have been $142 million, for which Medicare reimbursed approximately $95 million. The indictment is available here.

As described in Part One, many of the other recent enforcement actions involve similar patterns of conduct that the OIG outlined in its Special Fraud Alert as “suspect characteristics.” It is important for providers to be forewarned and cognizant of these suspect characteristics before entering into any arrangements involving telemedicine, as ignorance of the law is no defense. Because fraudulent schemes will often implicate multiple complex and interrelated federal laws, including the Federal Anti-Kickback Statute, even accidental ensnarement can lead to criminal, civil, and/or administrative liability on the part of the participants.

For more information, the Special Fraud alert is linked here: https://oig.hhs.gov/documents/root/1045/sfa-telefraud.pdf

_{[1] OIG includes telehealth, telemedicine, and telemarketing services under the broad definitional umbrella of “Telemedicine Companies.”}

_{[2] The OIG’s Special Fraud Alerts can be found online here.}

_{[3] DOJ’s July 20, 2022 Press Release can be found online here.}