DOJ Targets Telemedicine Fraud in $1.4 Billion Roundup


September 17, 2021 4:59 pm

The Justice Department is targeting over $1.4 billion in alleged health-care fraud in a nationwide enforcement spree involving 138 defendants and 42 doctors and nurses.

The Friday announcement includes $1.1 billion in alleged schemes involving telemedicine companies arranging for fraudulent orders for expensive durable medical equipment and genetic testing, according to Assistant Attorney General Kenneth Polite, who spoke to reporters.

That part of the announcement could have a chilling effect on the future of telehealth, which has expanded rapidly during the Covid-19 pandemic but which has been the target of significant DOJ enforcement actions for three years running.

The Department of Health and Human Services Office of Inspector General is conducting a nationwide review of fraud and compliance trends in telehealth during the pandemic. The results of the audits could play a role in Congress as lawmakers consider whether to allow the Covid-19 expansion in telehealth to become permanent.

The enforcement action also involved $133 million in fraud connected to substance use facilities, $29 million in Covid-19 fraud, and $160 million in illegal opioid distribution and other health-care fraud schemes, the DOJ said in a Friday statement.

“The ability to provide health care remotely is a critical tool in the delivery of health-care services, and is a reason the Department of Justice remains committed to ensuring that the adoption of this technology is not tainted by wrongdoers,” Polite told reporters.

The announcement involved a group of similar cases that were charged by the DOJ around the country between Aug. 1 and Sept. 17, according to Joshua Stueve, a department spokesman.

Telemedicine Schemes

The telemedicine schemes involved companies allegedly paying doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and pain medications, the DOJ statement said.

In many cases, the participating doctors and nurses entered orders without any patient interaction or with only a brief phone conversation with patients they had never seen, it said.

The DOJ alleged in the biggest of the cases that a Florida owner of several telemedicine companies carried out a $784 million scheme involving illegal orders for durable medical equipment and kickbacks to doctors and nurses who wrote fraudulent orders.

But telehealth advocates criticize the Justice Department’s rhetoric about these fraud cases and what they say is its failure to distinguish traditional fraud carried out using the reach of telemarketing from fraudulent claims for the provision of telehealth services.

Most of the cases charged Sept. 17 involved conduct that took place before the Covid-19 pandemic and before the Centers for Medicare & Medicaid Services relaxed restrictions on telehealth as a means of ensuring continuing access to health-care services amid pandemic-related restrictions, Allan Medina, chief of the Health Care Fraud Unit in the DOJ’s Criminal Division, told reporters on the call.

The cases also didn’t for the most part involve fraudulent billing for telehealth services, with the exception of a Florida case in which doctors took advantage of the relaxed regulations to bill for telehealth encounters that never took place, as well as to provide orders for unnecessary medical equipment, Medina said.

The Alliance for Connected Care, a supporter of expanded telehealth services, said in a statement that it was “concerned by the incorrect narrative created by continued DOJ accusations of telehealth fraud.”

“We encourage the DOJ to consider the meaningful corrections made by the HHS OIG in February 2021 when it clarified the difference between “telefraud” schemes (which this represents) from telehealth fraud—which there has been very little evidence of thus far,” Krista Drobac, the alliance’s executive director, said in the statement.

A September 2020 DOJ health-care fraud “takedown” included more than $4.5 billion in schemes involving telemedicine.

A takedown from the year before involved $2.1 billion in fraudulent claims for cancer-related genetic testing orchestrated by telemedicine companies working with testing laboratories and providers.

The alleged $784 million fraud scheme is United States v. Henry, D.N.J., No. 2:19-cr-00246, superseding indictment 8/10/21.