During the COVID-19 pandemic, healthcare providers greatly expanded their use of telehealth services to provide medically necessary care to their patients. Practitioners’ increased use of telehealth services also led to greater law enforcement scrutiny by the U.S. Department of Health and Human Services Office of Inspector General (OIG) and the U.S. Department of Justice (DOJ). On July 20, 2022, in the wake of significant telehealth enforcement actions, OIG issued a Special Fraud Alert urging healthcare practitioners to exercise caution when entering into arrangements with telemedicine companies. That same day, OIG also updated its telehealth resource page featuring compliance and enforcement resources for providers and telehealth companies. Healthcare providers should consider re-evaluating and updating their ethics and compliance programs in light of these new OIG guidances.
Expanded Telehealth Fraud and Abuse Enforcement
Recent federal telehealth enforcement actions have targeted providers ordering or prescribing items or services for patients they allegedly never examined or meaningfully assessed to determine the medical necessity of items or services ordered or prescribed. Other enforcement actions have involved telehealth companies paying practitioners fees correlating with the volume of federally reimbursable items or services ordered or prescribed by the practitioners, which investigators alleged were intended to incentivize practitioners to order medically unnecessary items or services. Notably, on the same day OIG issued its Special Fraud Alert, DOJ announced criminal charges against 36 defendants in 13 federal districts across the United States for more than $1.2 billion in alleged fraudulent telemedicine, cardiovascular and cancer genetic testing and durable medical equipment (DME) schemes. DOJ focused mainly on alleged payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for the referral of patients by medical professionals working with fraudulent telehealth and digital medical technology companies. OIG’s Special Fraud Alert emphasizes that 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.”
OIG’s “Suspect Characteristics” for Telehealth Arrangements
Based on recent enforcement experience, OIG has developed a list of “suspect characteristics” related to healthcare practitioner arrangements with telemedicine companies. According to OIG, the following suspect characteristics, taken together or separately, present heightened risk of healthcare fraud and abuse:
- Patients for whom healthcare practitioners order or prescribe items or services were identified or recruited by the telemedicine company, telemarketing company, sales agent, recruiter, call center, health fair, and/or through internet, television, or social media advertising for free or low out-of-pocket cost items or services;
- Practitioners do not have sufficient contact with or information from patients to meaningfully assess the medical necessity of the items or services ordered or prescribed;
- The telemedicine company compensates practitioners based on the volume of items or services ordered or prescribed, which may be characterized as compensation based on the number of purported medical records that the practitioners reviewed;
- The telemedicine company only furnishes items and services to Federal health care program beneficiaries and does not accept insurance from any other payor;
- The telemedicine company claims to only furnish items and services to individuals who are not Federal health care program beneficiaries, but may in fact bill Federal health care programs;
- The telemedicine company only furnishes one product or a single class of products (e.g., durable medical equipment, genetic testing, diabetic supplies, or various prescription creams), potentially restricting a practitioner’s treating options to a predetermined course of treatment; and
- The telemedicine company does not expect practitioners to follow-up with patients nor does it give practitioners the information required to follow-up with patients (e.g., the telehealth company does not require practitioners to discuss genetic testing results with each patient).
Providers entering arrangements with telemedicine companies including one or more of these suspect characteristics “should exercise care and may face criminal, civil, or administrative liability depending on the facts and circumstances.”
Implications for Healthcare Providers
Although it does not want to discourage legitimate telehealth arrangements, OIG urges healthcare providers to use “heightened scrutiny” and “exercise caution” while considering the Special Fraud Alert’s suspect criteria before entering arrangements with telehealth companies. Healthcare providers placing a premium on proactive compliance should therefore use the Special Fraud Alert as an opportunity to re-evaluate and buttress their ethics and compliance programs. Practitioners can utilize OIG’s list of suspect characteristics to review existing and future telehealth arrangements to ensure compliance with healthcare fraud and abuse statutes such as the federal Anti-Kickback Statute, healthcare fraud statute, and the False Claims Act, and carefully review information provided by telehealth companies to determine compliance with coverage, payment, and billing requirements for federal healthcare programs. Practitioners also can review patient-facing telehealth materials to glean what information is provided to patients.
It has been said that an “ounce of prevention is worth a pound of cure.” Truer words have never been written when it comes to healthcare fraud and abuse compliance. In the words of Deputy Attorney General Lisa O. Monaco, “[c]ompanies need to actively review their compliance programs to ensure they adequately monitor for and remediate misconduct — or else it’s going to cost them down the line.”
About the Author
Vince Farhat is the chair of JMBM’s White Collar Defense and Investigations practice. He previously served as an Assistant United States Attorney in the Major Frauds Section of the U.S. Attorney’s Office for the Central District of California. While in Major Frauds, Vince served as the Criminal Healthcare Fraud Coordinator for the U.S. Attorney’s Office and oversaw the investigative activities of the U.S. Department of Justice Medicare Fraud Strike Force for the Central District.
 Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution When Entering Into Arrangements With Purported Telemedicine Companies, U.S. Department of Health and Human Services Office of Inspector General (July 20, 2022) (available at Special Fraud Alert–Telefraud (hhs.gov) (hereinafter “OIG Telehealth Fraud Alert”).
 OIG Telehealth Fraud Alert, p. 3.
 Justice Department Charges Dozens for $1.2 Billion in Health Care Fraud, DOJ Office of Public Affairs (July 20, 2022) (available at Justice Department Charges Dozens for $1.2 Billion in Health Care Fraud | OPA | Department of Justice).
 OIG Telehealth Fraud Alert, p. 3.
 See OIG Telehealth Fraud Alert, pp. 4-5.
 Id. P. 5.
 Deputy Att’y. Gen. Lisa O. Monaco, Keynote Address at the ABA’s 36th National Institute on White Collar Crime, Justice.gov (Oct. 28, 2021).