As anticipated, the federal government has been monitoring the potential for fraud and abuse involving telehealth. Providers, lab owners, and medical equipment companies have been recent targets of investigations. The government's attention has focused on claims related to durable medical equipment and lab testing.

In September, the Department of Justice announced a nationwide enforcement action involving $1.1 billion in telehealth-related claims based on an investigation dubbed "Operation Happy Clickers." Providers, who were under investigation, conducted little to no review of patient information provided by a third party before ordering durable medical equipment or cancer genetic testing. In many cases, the fraud scheme involved an international call center reaching out to Medicare beneficiaries and sending orders to locum tenens companies. Practitioners were paid to review and sign orders as a "telemedicine" visit, and the orders were then sold to DME supply companies and laboratories. In Michigan, one nurse practitioner faces criminal penalties, and two physicians face civil penalties related to this scheme.

Providers under investigation ignored red flags, such as obvious disparities between exam "findings" in patient records (who were never physically examined) and the equipment ordered. One Michigan provider admitted to signing approximately 335 orders for DME in one week, spending an average of 18 seconds reviewing the patient's information (exemplifying the moniker "Happy Clicker"). Also, in some circumstances, multiple braces were ordered for a single patient without evidence of medical necessity, or a patient who may have actually needed a knee brace was ordered a brace for the wrong side or an ankle instead.

Also, in September, a laboratory owner in Florida plead guilty for his role in a $73 million Medicare kickback scheme. In that case, the lab owner admitted to conspiring to pay kickbacks in exchange for arranging for telehealth providers to authorize cancer and cardiovascular genetic testing, similar to Operation Happy Clickers.

In another example, dubbed "Operation Brace Yourself," a Florida woman plead guilty in February after her company submitted over $400 million in illegal DME claims involving telehealth. The company at issue here owned hundreds of retail storefronts that allegedly provided kickbacks for fraudulent telehealth orders for back and knee braces despite minimal to no interaction with the patient.

Avoiding liability for fraud and abuse related to telehealth care is no different from in-person treatment. Providers must determine whether a telehealth visit is appropriate for any given patient. If a physical examination is needed, providers are cautioned not to use telehealth as a shortcut to diagnosis or treatment. Further, when signing orders presented by a third party, providers must still review the patient's information and not simply rely on a third party's representation that the patient needs a particular type of treatment or device.

Kimberly will be presenting more on this topic at the Dickinson Wright Health Law Summit on November 4th & 5th. Click here to register.

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