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Rise of Telehealth Fraud and Abuse: How it Happens and How You Can Report it

Date Published
Jun 07, 2022

In the few years since COVID-19 first reached the United States, the rate of telehealth appointments has soared to help bridge the gap between stay-at-home measures and the need for healthcare. While telemedicine has been enormously helpful for many, some bad actors have also used it as an opportunity to take advantage of situation to overcharge, defraud, and otherwise scam and skim off more than their fair share of public funds.

Medicare, Medicaid, and other government-funded insurance pools are protected by the False Claims Act and other state and federal qui tam laws. Anyone who knowingly makes a false claim against the government is subject to up to treble penalties, as well as individual financial damages for each instance of fraud.

Whether you work in healthcare, have knowledge about telehealth billing practices, have been a telehealth patient, or simply have information about healthcare providers attempting to defraud public funds, you may be eligible to become a whistleblower. Whistleblowers can receive significant financial rewards and are protected against workplace retaliation. For more information about blowing the whistle on telehealth fraud and abuse, speak to our expert team of attorneys today.

What is Telehealth Fraud?

The rise in telemedicine is predicted to continue, with the industry expected to reach $113 billion in value by 2025. With this enormous increase in the number of service providers, combined with relaxed regulations has, unfortunately, come fraud, waste, misuse, and graft. Unscrupulous providers have been discovered charging patients and insurers for so-called “consultations” that barely last a few minutes over the phone or by glitching video connections. Other common examples include:

  • Up-coding: Relatively common, up-coding in telehealth fraud schemes often involves overstating both the time spent with patients, as well as the complexity of the consultation. Because these calls happen so frequently, they can be harder to track.
  • Misrepresentation of services: Virtual check-ins, telephone calls, video consultations, and more may be reported differently to Medicare and other insurers. It is important that the kind of visit is accurately reported to ensure the proper reimbursement level.
  • Kickbacks: Telehealth kickbacks involve advertising or offering financial incentives to provide medically unnecessary testing, such as genetic screening, prescriptions, or other medical devices.
  • Billing for services not rendered: Of particular concern in telehealth fraud schemes are physicians billing for appointments that could not take place or which were hindered by poor connections, lag times, or other technological difficulties that made it impossible for the patient to receive care. Even if the provider attempted to provide services with the best of intentions, if a patient cannot benefit from them, they should not be billed.

Telehealth Fraud Schemes: Trends and Developments

Studies from the U.S. Department of Health and Human Services show a 63-fold increase in telehealth appointments and utilization among those with Medicare coverage. In a 2021 survey, one in four respondents in the U.S. reported scheduling or attending a telehealth appointment in the previous four weeks.

Telehealth fraud is the latest iteration of healthcare fraud and abuse of publicly funded systems. Prior to the COVID-19 emergency, telehealth appointments were relatively rare, and reimbursement for telemedicine from Medicare and Medicaid was more stringently assessed. However, the Centers for Medicare and Medicaid (CMS) decided in March 2020 to offer certain waivers and flexibilities for telemedicine reimbursements in the face of unprecedented circumstances.

According to a CMS report, 43.5 percent of Medicare primary care visits in 2020 were made via telehealth. This amounts to over 1.28 million visits per week, compared to just 0.1 percent of Medicare-reimbursed visits that were made using telemedicine in pre-pandemic times.

Recent DOJ Telehealth Fraud Settlements

Telehealth fraud and abuse have been targeted by the Department of Justice in an effort to crack down on misappropriation of government funds. Some recent DOJ actions and settlements have involved:

  • Operation Rubber Stamp: This wide-ranging takedown was the first billion-dollar fraud case in the Southern District of Georgia. This scheme involved the telemarketing of unnecessary durable medical devices, testing, pain medications, and equipment to patients by doctors whom they had never met in person or saw only for brief telehealth consultations. An international telemarketing network allegedly paid doctors and nurses in a kickback scheme in order to advertise or prescribe their devices to patients via surface-level appointments. These kinds of fraudulent medical care opportunities not only cost taxpayers billions in Medicare reimbursements, but also delayed patients’ abilities to seek out genuine care for their ailments.
  • Physician indicted in $10 million telemedicine health care scheme: A Brooklyn orthopedic surgeon was charged with the submission of up to $10 million in false claims after either not examining patients whose sessions were billed to Medicare, or offering consultations that lasted under five minutes, but still billed at the full rate. FBI Special Agent-in-Charge DiGuiseppi pointed out that cases such as these not only seek to enrich unscrupulous providers at the expense of their patients’ wellbeing, but that they also “contribute to the rising cost of healthcare for everyone.”
  • Creation of the fraud unit’s National Rapid-Response Strike Force: This unit is made up of prosecutors using data analytics and other tools to more easily detect fraud and graft in telehealth abuse schemes. Department of Justice actions have already announced up to $1.4 billion in alleged discovered losses. Of this, $1.1 billion is tied to telehealth scams.

How to Report Telehealth Fraud: What You Can Do

Federal qui tam law gives whistleblowers the opportunity to recoup up to 30 percent of the government’s overall reward in cases of fraud or corruption. Telehealth scams are one rising example of attempts to defraud public health insurance funds, such as Medicare and Medicaid. If you have information that could help lead to a successful recovery of misappropriated funds, don’t wait. Speak to a qualified qui tam attorney today to find out what your next steps should be, and if you might be eligible to receive significant financial compensation from your case.

Speak to a Qui Tam Lawyer about Telehealth Fraud Schemes

The team at Tycko & Zavareei LLP have helped our clients and the federal government win back millions in qui tam cases involving pharmaceutical fraud, laboratory fraud, false billing claims, and other kinds of healthcare fraud. Telehealth fraud schemes may be the latest variety of scam to gain popularity, but our experienced team knows what you will need to bring a strong whistleblower case.

Our qui tam lawyers can answer any questions you may have during a free and confidential consultation. Contact us today.

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Our experienced qui tam attorneys are available for a confidential, no-cost, no-commitment, initial evaluation of your case. Call us now at (202) 973-0900, or begin the process by completing our Confidential Case Evaluation Form.
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