Content Updated: February 27, 2025
Telemedicine fraud has long been a concern, but whistleblowers are needed now more than ever during the coronavirus crisis as the opportunities for Medicare fraud in telehealth cases have greatly expanded along with telemedicine use.
The huge jump in telehealth claims – as more patients choose to stay home because of COVID-19 concerns – makes it extremely hard for Medicare to differentiate fraudulent claims from those submitted for legitimate telehealth services.
What is Telemedicine?
Telemedicine refers to the use of technology to provide healthcare services remotely. This can include virtual consultations, remote monitoring, and health education delivered via phone, video conferencing, or other electronic means.
Telemedicine is an important way for those who are unable to go to a doctor’s office to consult with their healthcare providers or for patients who have concerns about possible exposure to the coronavirus. But some fraudsters exploit the need for telehealth for their own fraudulent financial gain.
What is Telehealth Fraud?
Telehealth fraud is a type of healthcare fraud that involves the deceptive or illegal use of telehealth services to obtain improper payments from Medicare, Medicaid, or other healthcare programs.
Oftentimes, telemarketing companies work with sham telemedicine companies that find doctors willing to be paid to write medically unnecessary prescriptions or orders for Medicare beneficiaries without speaking to them or evaluating their condition.
Whistleblowers can report telemedicine fraud and receive rewards under the False Claims Act
Whistleblowers who know of telehealth fraud can report the fraudulent healthcare claims and work with the government to stop the fraud by filing a “qui tam” case under the False Claims Act.
The False Claims Act empowers private citizens to sue entities and individuals who are defrauding the government and recover the stolen funds on the government’s behalf. In most successful qui tam cases, whistleblowers and their attorneys join with the government to pursue the lawsuit.
The law offers whistleblowers protection from employer retaliation as well as rewards. Whistleblowers who file qui tam lawsuits are entitled to 15 percent to 30 percent of the amount the government recovers as a result of their cases.
Before deciding whether to file a qui tam lawsuit, whistleblowers should consult with an experienced whistleblower attorney to consider the risks and rewards of pursuing a case and to determine how best to proceed. (The False Claims Act requires that whistleblowers use attorneys to file qui tam cases.)
[For a free, confidential consultation with the whistleblower attorneys of Phillips & Cohen, contact us.]
Examples of telemedicine fraud schemes
Fraudsters often target the elderly, disabled, and other vulnerable patients in fraudulent telehealth schemes, capitalizing on their fears and social isolation.
There are many ways that false claims for Medicare payments can occur with telehealth. Some telemedicine fraud schemes involve:
- Kickbacks paid to doctors or others to get referrals for healthcare services or treatment in violation of the Anti-Kickback Statute.
- False billing or coding for medical treatment and services, including:
- Upcoding: Billing for a higher level of service than was actually provided. In telemedicine, fraudsters may inflate the time spent on services or the complexity of services provided to receive more payment than they are entitled to.
- Unbundling: Billing separately for services that should be bundled together under a single code. This can artificially inflate reimbursement amounts.
- Unnecessary or excessive prescriptions, especially opioid prescriptions.
- Unnecessary or non-existent screening tests for cancer and other conditions. Oftentimes, the test results aren’t even sent to patients.
- Billing Medicare for durable medical equipment sent to Medicare beneficiaries who don’t need the equipment or didn’t request it.
- Misrepresenting virtual services by billing for telehealth services that don’t meet the requirements for reimbursement. For example, some services may require both audio and video interaction to qualify, and billing for an audio-only call as a qualifying video consultation would be fraudulent.
- Billing for “inadequate” appointments that don’t provide meaningful care (Ex. due to technical difficulties, poor connection, or lack of patient understanding due to communication barriers) can be considered fraudulent.
- Self-referrals to facilities or services in which the healthcare provider has a financial interest when the referral is not medically necessary or in the patient’s best interest. This can be a form of fraud if the primary motivation is financial gain rather than appropriate patient care.
Telemedicine fraud – enforcement actions
The federal government has stopped many fraudulent telehealth schemes, including two that each cost Medicare billions of dollars and are among the largest Medicare fraud cases ever prosecuted.
In one telemedicine scheme, telemedicine companies allegedly duped Medicare beneficiaries into signing up for unnecessary or nonexistent cancer-screening, genetic tests that were very expensive.
The doctors involved with this telemedicine fraud usually did not examine or speak with the Medicare beneficiaries for whom they ordered tests. Some tests were repeated many times. Beneficiaries often did not even receive their test results or, if they did, the tests were worthless to their actual doctors.
In a separate case, more than five telemedicine companies, 130 durable medical equipment (DME) companies and three licensed medical professionals took part in an alleged telehealth scheme involving the sale of back, shoulder, wrist and knee braces.
The telemedicine scheme lured in hundreds of thousands of Medicare beneficiaries. Dozens of people, ranging from corporate executives to healthcare professionals, were charged in the case last year. At least one doctor has pleaded guilty.
The owner of several telemarketing companies paid $2.5 million last year to settle charges that his companies fraudulently obtained information about private insurance and Medicare coverage from consumers across the country.
He used that personal information to arrange for the consumers to receive prescription pain creams they didn’t need or request as well as other similar products. He allegedly sold those prescriptions to pharmacies based on the value and volume of the prescriptions under the guise of marketing services.
[Contact Phillips & Cohen to discuss how to report specific instances of healthcare fraud and possible rewards under the False Claims Act.]
Telemedicine fraud during the covid-19 pandemic
The Centers for Medicare & Medicaid Services (CMS) has relaxed some rules around telemedicine to make it easier for patients to access care. While that helps many patients and healthcare providers, the rule changes make it easier for bad actors to defraud Medicare.
CMS has added many more billing codes for telemedicine, so that patients can consult with doctors remotely for a range of medical problems, such as flu symptoms or a muscle ache.
CMS also has eased licensing requirements for doctors who practice across state lines and restrictions on opioid prescriptions via telehealth, which raises concerns of excessive opioid prescriptions being offered.
In addition, providers who use telemedicine are allowed to waive patient deductibles and copayments during the coronavirus pandemics. Generally, the waiver of patient deductibles and copayments are considered to be kickbacks as patients are less likely to complain about charges or unnecessarily use medical services if they have to pay a share of the bill.
All of these changes make it even more vital that whistleblowers step forward when they know of telemedicine fraud.
FAQs about telehealth fraud
Who investigates telehealth fraud?
Several federal agencies investigate telehealth fraud, including the Department of Justice (DOJ), the Department of Health and Human Services Office of Inspector General (HHS-OIG), and the Federal Bureau of Investigation (FBI). Depending on the nature of the fraud, state and local law enforcement agencies may also be involved.
How do I detect telehealth fraud?
Potential signs of telehealth fraud include:
- Receiving medical equipment or prescriptions you did not order or need
- Being pressured to accept unnecessary medical services
- Discrepancies in medical bills, such as charges for services you didn’t receive
- Unusual billing patterns, such as repeated claims for the same service
If you suspect fraudulent activity, reviewing medical records and billing statements can help identify potential issues.
How can whistleblowers report telehealth fraud safely?
Whistleblowers can report suspected telehealth fraud to federal agencies such as the HHS-OIG or the DOJ. Some programs allow for confidential or anonymous reporting, but the process and protections depend on the applicable whistleblower program. Consulting an experienced whistleblower attorney can help ensure proper reporting while protecting your identity and legal rights.
Have questions about telemedicine fraud? Need assistance?
If you know of instances of telemedicine fraud and would like to consider your options for moving forward, contact the whistleblower attorneys at Phillips & Cohen.
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