Telehealth Fraud, Telehealth services

Telehealth Fraud: What Are the Risks with Offering Telehealth Services Now?


September 23, 2021 | Reading Time: 3 Minutes

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With the many perks of telehealth, such as allowing the healthcare industry to stay open and available for patients throughout the pandemic, its use has also made it ripe for potential abuse. Based on the federal government’s aggressive history of investigating medical fraud and abuse, healthcare organizations that fail to stay compliant with telehealth rules and regulations can potentially put themselves at risk for exposing their practices, resulting in costly litigation and fines. The use of telehealth services predates the COVID pandemic, despite its recent increase in usage throughout the last year.

During the first half of 2020, about one-third of all appointments for commercially insured and Medicare Advantage enrollees transpired utilizing telehealth — a 23-fold increase from the prior year. What’s more, telehealth services’ availability has resonated with consumers, and health plans report double-digit gains in overall satisfaction. In other words, telehealth has grown to be a staple of quality healthcare service. However, the ubiquity of telehealth has also gained the attention of bad actors and is growing interest from federal agencies in regards to potential telehealth fraud and abuse.

The Department of Justice (DOJ) announced last fall the most significant health care fraud takedown in the agency’s history: $6 billion in alleged fraud losses, $4.5 billion tied to telehealth). Officials have documented various instances regarding telemedicine executives providing kickbacks to providers for unnecessary orders of durable medical equipment (DME), pain medications, and genetic and diagnostic testing. In Operation Rubber Stamp, DOJ declared that one particular telehealth scheme had bilked Medicare for $1.5 billion in durable medical equipment alone. As a result, more than 250 providers had their ability to bill Medicare revoked.

While telehealth is a new aspect for many patients and clinicians, its association with healthcare fraud and abuse predates the COVID pandemic. In’s previous article, $784M Telehealth Fraud Case? Medicare Fraud Surfaces Again, a Florida telemedicine company owner was charged with telehealth fraud, illegal kickbacks, and tax evasion arising from allegedly fraudulent orders to durable medical suppliers, pointing to $784 million in Medicare claims. The year prior, the DOJ charged 35 healthcare professionals from telehealth and cancer genetic testing laboratories with healthcare fraud, resulting in  $2.1 billion in Medicare claims between 2017 and 2019.

With telehealth’s consistent growth across the past two years, federal investigators are likely to take action against bad actors. The OIG acting head, Inspector General Christi A. Grimm, recorded earlier this year,

“It is important that new policies and technologies with the potential to improve care and enhance convenience achieve these goals and are not compromised by fraud, abuse, or misuse. OIG is conducting significant oversight work assessing telehealth services during the public health emergency”.

Increased Oversight

As a result of the increased oversight from federal and state agencies, healthcare organizations have to educate staff members about the potential risk for telehealth fraud and abuse and implement a system to prevent non-compliance issues. Troutman Pepper legal specialists have named four potential telehealth fraud schemes most likely to draw investigation from government officials.

  • Upcoding time and difficulties. The Centers for Medicare & Medicaid Services will closely monitor the number of times providers claim to have spent delivering services to patients via telehealth.
  • Misrepresentation of provided services. With the number of virtual services available to patients, providers must fully understand which activities qualify and the necessary coding and billing procedures.
  • Services not rendered. The law firm advises that submitting claims for services that providers haven’t rendered represents a “significant enforcement risk.” Ineffective telehealth services can potentially result from experiencing technical difficulties or barriers standing in the way of a patient thoroughly benefiting from their virtual visit.
  • Federal authorities have clarified their interest in rooting out schemes where providers accept payments for unnecessary durable medical equipment, diagnostic testing, or medicines. Healthcare companies must work with staff members and business partners to avoid telehealth fraud and abuse to ensure state and federal law compliance.

Essential Activities to Avoid Telehealth Fraud

Here are some essential activities to perform to save your practice or company from telehealth fraud:

  • Management of policy to react to change control (a systematic approach to determine impacts or changes that might affect how a healthcare service operates) and remediate gaps
  • Third-party/vendor risk management to recognize potential risks and maintain contracts
  • Incident management to promote investigation and incident reporting
  • Revenue risk integrity (assuring that clinical encounters are translated into revenue, operational efficiency, compliance, and optimal compensation for services) to monitoring claims and rejections for financial exposure and trends

Telehealth isn’t going away anytime soon, nor is the interest of federal and state agencies in activities constituting healthcare fraud and abuse.

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