OIG Issues Alert on Telemedicine Fraud
The Department of Health and Human Services Office of Inspector General (OIG) recently issued a Special Fraud Alert on arrangements with telemedicine companies, describing seven characteristics that could suggest a risk of fraud and abuse.
The alert addresses potential kickbacks and substandard medical practices designed to generate medically unnecessary orders and prescriptions. Some telemedicine companies have “exploited the growing acceptance and use of telehealth” and present “the potential for considerable harm to federal healthcare programs and their beneficiaries,” according to OIG.1
OIG issued the alert in response to repeated requests to testify in cases involving telemedicine fraud, says Nathaniel M. Lacktman, JD, partner with Foley & Lardner in Tampa, FL. The alert is OIG’s position on what they will testify to regarding the issue.
“Simultaneously, it is a message to the industry at large that an increasing number of arrangements with a similar pattern have been identified, and the government wants them to stop it,” Lacktman says. “The bullet points they lay out in the alert are an amalgamation of different factual scenarios that the government has seen emerge, with suspect conditions or red flags. It can serve as a mini-audit tool to help reduce the risk they are violating the Anti-Kickback Statute.”
Lacktman notes major red flags outlined in the OIG alert. The first concerns whether the telemedicine experience and the flow of funds mirror the typical way a patient interacts with a doctor or other provider. If not, that might signal a problem. Another addresses telemedicine arrangements that offer patient inducements, such as waiving copay fees or offering anything else of value, which Lacktman calls a major red flag.
“Eliminating the patient’s financial responsibility may cause the patient to become reckless and overuse the resource,” Lacktman explains.
OIG also advised using caution regarding who is paying for the telemedicine service. Typically, the patient or the insurance company would pay the medical group directly, but any arrangement in which payment is made by a pharmaceutical company or marketing group would be suspect.
OIG Warning Signs
OIG laid out these warning signs that an arrangement with a telemedicine provider may not be proper:
- The patients were identified or recruited by the telemedicine company, sales agent, telemarketing company, recruiter, call center, and/or through internet, TV, or social media ads for free or low-cost items or services;
- The provider cannot meaningfully assess the medical necessity of ordered or prescribed services due to lack information from the patient;
- Provider compensation is based on the volume of items or services ordered or prescribed, which may be characterized as compensation based on the number of medical records reviewed;
- The telemedicine company does not accept insurance from any payor except federal healthcare program beneficiaries;
- The company claims to only service individuals not enrolled in federal healthcare programs but may in fact bill these programs;
- The company only provides one product or a single class of products, such as durable medical equipment, genetic testing, diabetic supplies, or various prescription creams, potentially restricting treatment options.
Lacktman notes the list is not exhaustive, and the presence or lack of any these factors does not automatically mean the arrangement is legal or illegal.
- Office of Inspector General. Special Fraud Alert: OIG alerts practitioners to exercise caution when entering into arrangements with purported telemedicine companies. July 20, 2022.
- Nathaniel M. Lacktman, JD, Partner, Foley & Lardner, Tampa, FL. Phone: (813) 225-4127. Email: [email protected].
The Department of Health and Human Services Office of Inspector General recently issued a Special Fraud Alert on arrangements with telemedicine companies, describing seven characteristics that could suggest a risk of fraud and abuse.
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