The Executive Suite: Telehealth fraud and abuse enforcement efforts unlikely to taper

At the outset of the COVID-19 pandemic, the Centers for Medicare & Medicaid Services (CMS) relaxed restrictions on telehealth services, allowing telemedicine to be provided to more patients, in more locations, through more varied modalities, and by a broader range of healthcare practitioners. Within that new regulatory environment, the provision and use of telehealth care exploded. But the history of government healthcare fraud and abuse enforcement efforts teaches one unassailable lesson: increased utilization inevitably leads to increased government scrutiny.

Telehealth Enforcement Efforts Pre-Date the COVID-19 Pandemic

Many physicians began to utilize telemedicine increasingly in recent years as a means to expand access to healthcare before the COVID-19 public health emergency. As such, it is not surprising that enforcement actions related to telehealth also appeared to be on the rise even pre-pandemic. Here are three examples where prosecutors allege illegal kickbacks were paid to doctors who prescribed treatments for patients without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen:

In April 2019, the U.S. Department of Justice (DOJ) announced charges against 24 individuals, including executives of five telemedicine companies and three licensed medical professionals; prosecutors alleged that durable medical equipment (DME) companies paid illegal kickbacks and bribes in exchange for Medicare patient referrals for DME.
In September 2019, the DOJ announced charges against 35 individuals, including nine physicians, associated with dozens of telemedicine companies and cancer genetic testing laboratories in a similar scheme. The DOJ claimed that the fraudulent scheme caused more than $2.1 billion in improper billing to Medicare.
In April 2020, the DOJ announced charges against the owner of two telemedicine companies alleging improper payments to physicians and nurses in exchange for DME orders, part of a larger telemedicine scheme that implicated $480 million in Medicare billing.

Telehealth’s Expansion and Heightened Enforcement

Historically focused primarily on rural areas and populations, increased access to telehealth services in 2020 caused an explosion in telehealth utilization. Before the pandemic, less than one percent (0.1%) of Medicare primary care visits were provided through telehealth; but by April 2020 that percentage had skyrocketed to nearly half (43.5%) of all such visits.

Not surprisingly, increased access to and use of telemedicine led to increased billing for telehealth services, and, as a result, heightened scrutiny by government enforcement agencies. Telehealth fraud was the focus of the 2020 national healthcare fraud takedown, announced by HHS-OIG in September 2020: The government claimed that the fraud schemes involved more than $6 billion in alleged loss and that $4.5 billion of that total related to schemes involving telemedicine.
What to Expect Next and How to Prepare for It

As long as utilization of telehealth services remains high, corresponding scrutiny and government enforcement efforts will remain focused on this area.

Physicians and other providers should expect and prepare for that scrutiny. Pre-pandemic enforcement efforts likely focused on the most egregious cases. As those efforts broaden, however, the government likely will scrutinize not only more providers but also conduct that may not necessarily appear on its face to be clearly fraudulent.

Past enforcement practices indicate that the government will analyze data points such as increases in billing, patient visits, and the number of new patients to attempt to locate both outlier providers and providers who have experienced a notable increase relative to their historical data. For example, given the efficiencies of telemedicine, it would not be surprising for a physician or practice to be able to see more patients than before telehealth restrictions were loosened. Nonetheless, the government may view an increase in visits, patients or claims submitted as a red flag.

Although a physician or practice cannot completely insulate itself from potential scrutiny, there are numerous ways to best position for or attempt to avoid that scrutiny:

Many of the telehealth fraud enforcement actions to date involve complex schemes that implicate many different parties playing different roles in providing telehealth services. Physicians should not and cannot rely on other parties’ representations that certain practices or arrangements comply with applicable regulations and restrictions.
Clear documentation of patient engagement remains particularly critical with telehealth, where regulators will surely focus on the legitimacy of the patient relationship and the necessity of the services provided, including any prescriptions or follow-up care.
Telehealth services are subject to a rapidly changing regulatory landscape. Providers should have a specific process in place for tracking and staying up to date on the current rules.
Audit, analyze, and know your own data—examine your practice from a regulator’s viewpoint to determine in a timely fashion whether red flags are being raised.
Carefully document compliance-related measures and decisions.

Working closely with legal counsel to review compliance measures and any questions that arise are critical as practices continue to offer telehealth services to better serve patients.