Medicare fraud, Telemedicine fraud, Telehealth fraud

$784M Telehealth Fraud Case? Medicare Fraud Surfaces Again


September 6, 2021 | Reading Time: 6 Minutes

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As the number of patients seeking telemedicine consultations grew during the pandemic, so did telemedicine fraud and abuse possibilities. Although many stakeholders are now embracing telehealth, some are stepping over the line to profit monetarily. Many instances of illegal kickbacks often go undetected. While rewards for business referrals are widespread in some industries, such offers and payments may infringe the Anti-Kickback Statute in healthcare. Let’s consider the example of Creaghan Harry, a Florida businessman who owns several telemedicine businesses across the country. Mr. Harry was recently found guilty of defrauding Medicare for more than $784 million.

According to the Justice Department, Harry orchestrated a criminal scheme involving telehealth fraud and unauthorized payments. The indictment states that Harry, his accomplices, and his telemedicine companies received kickbacks and bribes from medical equipment suppliers (DME) that later served to pay physicians to place medically unnecessary orders for these supplies. Such acts are considered illegal under 42 U.S.C.§1320a-7b (b). According to the indictment, Harry intentionally and repeatedly misled investors, lawyers, doctors, and others, including patients. The telemedicine fraud conviction could land Mr. Harry in prison for up to 60 years.

What is the Anti-Kickback Statute in Medicare Fraud?

The Anti-Kickback Statute prohibits quid pro quo arrangements, such as offering a benefit or a favor in exchange for a recommendation. Payments or tangible rewards provided to patients could also be unlawful. It is important to note that both sides of the transaction are held liable under the Anti-Kickback Statute: the party paying and the party receiving.

Harry’s case involves several states and nearly $1 billion worth of treatment. Thus, health care providers who contracted with Harry’s company may have fallen prey to unwitting telehealth law violations because of his alleged actions. While some physicians may have been aware of writing unnecessary prescriptions, others might have unknowingly made these mistakes.

How Medicare Telehealth Fraud Can Hurt You

Unprecedented in telehealth, the couching of this alleged fraud in Medicare made this scheme a possibility. The new technologies contracts make telemedicine fraud more complex to identify and investigate, thereby creating an increased likelihood for fraudsters to take advantage of payers as well as professionals. If you are a telehealth professional of any type, it may be important for you to be aware of how online employers can all too easily implicate you in telemedicine fraud. One of the many tactics used by deceptive employers is to ask all new providers to sign complex agreements, often with little time to thoroughly review terms or run the agreement by one’s legal counsel. Many such employment agreements saddle you far more responsibility than warranted, leaving employers with very little responsibility for a client or patient care.

How You Can Protect Yourself from Medicare, Telehealth & Telemedicine Fraud

The current climate of unprecedented growth in the telehealth industry, coupled with larger-than-ever consumer demand for medical and behavioral services, has spawned many new telehealth service offerings. Each of these offerings is hungry for ready, willing, and able clinicians to sign their agreements and start serving the digital consumer public. It behooves all practitioners to carefully read the fine print in any document to be signed when working with online employers. It is also important to find telehealth specialty attorneys to review all agreements to help you identify clauses that could be damaging to you in court.

A common legal clause used by telehealth employers to protect themselves from prosecution makes it explicit in the agreement and on their website that they are technology vendors and do not accept responsibility for your clinical decisions or anything with the client or patient care. By default, then, if you are being referred to clients or patients, the legal responsibility will become yours, and often, yours alone. This is true even if you are asked to use your employer’s technology. Even if that technology does not allow you to conduct the type of informed consent and intake processes or ongoing assessments you normally would conduct in-person, this is especially true with pivotal issues such as formal assessments, informed consent, billing practices, and documentation, including document retention and access. A few examples may be in order.

Example #1: Psychological Tests

Many clinicians fail to consider that if their employer offers psychological tests such as the PHQ-9 or MAST, they must typically have demonstrable training in how not only to use and interpret such tests but also in how to use and interpret those tests when administered online, to an unidentified consumer working with them in text messaging, email, telephone or any mixture of those services. The simple truth is that most clinicians in practice today have not received adequate training in the digital application of the PHQ-9, MAST, or any other “public domain” tests commonly made available by online employers. Without proof of training in digital assessment for all tests used online, the clinician can be found guilty of practicing outside the scope of their training.

Many digital employers make short shrift of informed consent. They often do not want to frighten consumers from their services by “overly complicated” or ”frightening” informed consent processes. Their needs can easily be at odds with a licensed clinician’s requirements to fully disclose and obtain verbal agreement about several issues, including but not limited to expectations, how to protect privacy, mandated reporting, duty to warn, suicide interventions, handling of emergencies, recording of sessions, involvement of family and friends as part of the delivery of care and much more. (For details, see: Legal/Ethical Issues II Best Practices & Informed Consent)

Example #3: Record Retention and Storage

If you take and store patient records in your online employer’s platform and decide to leave that employer, who retains control of the documents? Depending on your profession, you may be legally required to keep those records for 7-10 years. The complications don’t end there. Again, if you left the employer five years ago, and the patient makes a request of you to see their records, who then is responsible for delivering the requested documents? See HHS Stresses HIPAA ePHI Security: Information Access Management & Access Control for details of how aggressively the Office for Civil rights is prosecuting such violations of federal law, regardless of discretionary enforcement for other aspects of HIPAA during COVID. Other questions to consider when reviewing a legal agreement offered by an online employer are: Can you take client records with you? If you don’t remove them from the platform, who will have the authority to see them? How have these people been vetted? What are the criteria being used to vet these decision-makers?

What happens if your records show that you did not conduct an intake comparable to your in-person practice but rather that you went along with an abbreviated process to comply with the format allowed by the online employer? This is where the written agreement that you signed will come into play. If your employer has taken the stance that they are not liable for your clinical decisions, where does that leave you as the party who agreed to this arrangement for working through telehealth?

Example #4. Indemnification & Limits of Liability

Indemnification clauses are common in employment agreements of all types. However, most professionals signing indemnity agreements with traditional companies have a good sense of what is likely happening behind the scenes. This isn’t true of digital companies. Another common issue commonly found in written employment arrangements with clinicians, be they W-2 or W-9 arrangements, is that your financial recourse is limited to a small, fixed monetary amount. If you agreed to limit your employer’s liability for civil or regulatory lawsuits that come your way as a telehealth clinician, you would be exclusively reliant on your malpractice insurance. This, of course, leads to the question of whether or not you have read and understood your malpractice policy. If not, you may want to.

In sum, you are legally responsible for everything you do as a clinician, whether in-person or digitally. In each of the examples given above, you may want to consider that simply by signing your name on an employment agreement with an online employer, you are attesting to the fact that you are a licensed clinician. That signature implies that you are attesting to the claim of being competent to practice telehealth.

Unfortunately, many professionals practicing online are licensed but unaware of how much they don’t know about telehealth assessment or clinical issues; have limited technical skills; are and have been practicing illegally or unethically for decades. As explained in, Telehealth How to Legally Practice Over State Lines, each state has its own laws and many conflicts. Many clinicians working for online employers are likely to be unaware if they adequately document their interventions as those states require. They also may be unskilled at how to identify or deal with complex clinical cases through telehealth. They may be unaware of the evidence base related to their work or where to find it. All of these cause violations of telehealth law and lead to telemedicine fraud.

Consider the Role of the Litigating Attorney

Similarly, many professionals seem to be unaware of how easily their deficits can be exposed in court by a skilled litigating attorney whose expertise is to discredit clinicians practicing outside the scope of their training and experience.

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Linda Hanby
Linda Hanby
2 years ago

Thank you for the reminder of why I stay in my lane, practice with ethical soundness. I work with the patients and not for money. Shake my head at some of the things therapist impose on vulnerable people.

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