By DUSTIN T. WACHLER
Following recent enforcement actions against a variety of telemedicine arrangements throughout the country, the U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG) published a Special Fraud Alert to notify practitioners to exercise caution when entering arrangements with purposed telemedicine companies. The telehealth arrangements described in the OIG’s Alert implicate multiple federal laws including, but not limited to, the federal Anti-Kickback Statute, False Claims Act, criminal health care fraud statutes, as well as the OIG’s exclusion authorities related to kickbacks and Civil Monetary Penalties Laws provision for kickbacks. Additionally, such arrangements will also implicate state fraud and abuse laws related to kickbacks, fee-splitting, self-referral, false claims, and related issues.
The Special Fraud Alert explains that following dozens of investigations into telemedicine schemes, the OIG continues to target telehealth arrangements that may result in corruption of medical decision-making, harm to beneficiaries (including, for example, receiving medically unnecessary care, items that could harm the patient, or improperly delaying needed care), and increase in costs to the federal healthcare programs for medically unnecessary items and services. In several telehealth arrangements recently targeted by the OIG, telemedicine companies paid practitioners in exchange for ordering or prescribing items or services for purported patients with whom the practitioners had limited, if any, interaction, and without regard for medical necessity.
Due to the breadth of telehealth fraud identified throughout the country, the OIG determined to release a list of suspect characteristics related to physician and other practitioner arrangements within telemedicine companies which, taken together or separately, suggested an arrangement presents a heightened risk of fraud and abuse that may result in liability to practitioners under federal law. Specifically, the OIG advised practitioners to exercise heighted caution and scrutiny relative to any arrangement with a telemedicine company that includes one or more of the following suspect characteristics:
- The purported patients for whom the Practitioner orders or prescribes 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;
- The Practitioner does not have sufficient contact with or information from the purported patient to meaningfully assess the medical necessity of the items or services ordered or prescribed;
- The Telemedicine Company compensates the Practitioner based on the volume of items or services ordered or prescribed, which may be characterized to the Practitioner as compensation based on the number of purported medical records that the Practitioner 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; and
- 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.
As explained by the OIG, Medicare providers and suppliers who enter arrangements with telemedicine companies with one or more of the above characteristics should exercise additional care and may face criminal, civil, or administrative liability depending on the facts and circumstances of a given arrangement. While the OIG makes clear that the Alert is not intended to discourage providers from engaging in appropriate telehealth arrangements, which have been critical to the healthcare industry during the current public health emergency, it is clear that additional caution is appropriate given the widespread telehealth fraud recently subject to federal and state enforcement actions. Accordingly, Medicare providers and suppliers considering telehealth arrangements are encouraged to seek advice from legal counsel and otherwise exercise heightened scrutiny of any arrangements with telemedicine companies.
 U.S. Department of Health and Human Services, Office of Inspector General, “Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution When Entering Into Arrangements With Purported Telemedicine Companies” (July 20, 2022).