How Medical Providers Can Protect Themselves in Telemedicine Investigations
On April 9, 2019, the U.S. Department of Justice (DOJ) issued sweeping indictments against telemedicine companies, marketing groups, durable medical equipment (DME) companies, doctors, and other individuals and organizations involved in the telemedicine industry. While the specific allegations underlying these indictments vary, what all of the cases have in common is that the government is taking the position that the defendants’ telemedicine practices are not just unlawful, but criminal under federal law.
Telemedicine is Not Inherently Unlawful, But it Presents a Number of Risks for All Parties Involved
Health care providers, laboratories, marketers, and other individuals and businesses across the country need to understand that, in the current environment of vigorous federal law enforcement targeting Medicare-participating providers, practicing in the field of telemedicine carries significant risk. In the past five years, doctors in almost every state have been reprimanded by their state medical boards, had their licenses suspended, or even been disbarred as a result of engaging in non-compliant telemedicine practice. As the recent indictments show, other entities engaged in telemedicine are being targeted as well, with marketing groups, telemedicine companies, testing labs, and DME companies being particularly at risk for indictments flowing from DOJ, Federal Bureau of Investigation (FBI), and Office of Inspector General (OIG) investigations.
A Closer Look at Why Federal Authorities are Targeting Telemedicine
What is it that makes telemedicine so problematic for these entities (and their owners and executives)? In a typical telemedicine engagement, a physician finds an online ad from a telemedicine company, and inquires in an effort to make some extra money to pay off educational debt or supplement his or her household income. Telemedicine company representatives interview the physician, verify the physician’s state board credentials, and then offer the physician a position as a 1099 independent contractor. While specific fee schedules vary, most physicians receive approximately $25 to $40 per consultation.
So far, so good. Right? Actually, from the federal government’s point of view, the first issue has already arisen: The fact that the physician serves as an independent contractor and receives payment on a per-consultation basis raises Anti-Kickback Statute implications. Prosecutors called this a “per-click” payment. Also relevant is the fact that these arrangements usually result in above-average rates of approval. For example, a physician engaged to provide medical consultations to patients in quest for DME equipment may not realize that he or she approves the order in as many as 80% to 90% of all consultations. This staggering approval rate is even more likely to raise red flags if the physician’s background does not suggest orthopedic or surgical expertise, and this type of arrangement often triggers investigations in the area of medical necessity under the Medicare billing guidelines.
Similarly, federal authorities have recently enhanced their scrutiny of telemedicine consultations resulting in orders for prescription medications. The issue here is that the volume of consultations and orders potentially suggests (at least in the eyes of federal prosecutors) that the physician is issuing orders for prescriptions that patients does not actually need. Even if a physician applies his or her best independent medical judgment, another common problem due to the large quantity of consultations is that physicians often neglect to prepare precise and detailed documentation. Just like in a regular office setting, it is the physician’s notes that will ultimately decide whether medical necessity has adequately been established; and, even if a prescription or DME order is appropriate, lack of documentation can still lead to a federal inquiry and civil or criminal prosecution.
The Physician is Just One Small Part of Telemedicine Practice, and the DOJ, FBI, and OIG Often Focus on Larger Entities
Of course, the physician consultation is just one aspect of telemedicine practice. From marketing groups buying and selling lists of Medicare beneficiaries to toxicology laboratories and DME companies paying referral fees to physicians and telemedicine companies, all aspects of telemedicine practice can potentially run afoul of federal law. So, while – once again – there is nothing inherently unlawful about telemedicine itself, the relationships and practices that have become commonplace in the telemedicine industry can expose all parties involved to severe consequences.
More on the Recent DOJ Telemedicine Indictments
The DOJ’s recent indictments shed some additional light on how exactly federal authorities view the various relationships and practices involved in contemporary telemedicine practice. As summarized in the DOJ’s press release:
“The charges announced today target an alleged scheme involving the payment of illegal kickbacks and bribes by DME companies in exchange for the referral of Medicare beneficiaries by medical professionals working with fraudulent telemedicine companies for back, shoulder, wrist and knee braces that are medically unnecessary. Some of the defendants allegedly controlled an international telemarketing network that lured over hundreds of thousands of elderly and/or disabled patients into a criminal scheme. . . . The defendants allegedly paid doctors to prescribe DME either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen.”
This excerpt is notable in a number of respects. First, the DOJ seems to be calling out the fact that physicians prescribed DME to “patients they had never met or seen.” But, by its very nature, this lack of an in-person meeting underlies the fundamental nature of telemedicine – which, again, is not inherently unlawful. It is entirely possible to provide a medically-appropriate consultation from a remote setting, and Medicare, private insurers, and other organizations routinely pay for telemedicine consultations.
Second, the DOJ alleges that the telemedicine practice in question involved “an international telemarketing network.” The marketing aspect of telemedicine is one of the biggest issues for federal authorities, and marketing groups that refer Medicare beneficiaries to telemedicine companies (for a fee) are common targets in telemedicine investigations. Telemedicine companies, physicians, DME companies, laboratories, and other entities that pay these marketing groups are at risk as well (whether they pay directly or indirectly), as the Anti-Kickback Statute and other federal laws apply to parties on each end of an unlawful referral fee or kickback transaction.
Third, as we discussed above, one of the key issues in the indictments is the alleged lack of medical necessity. In short, the DOJ is alleging that DME companies obtained Medicare reimbursements for equipment that patients did not actually need – and that this triggers liability for everyone else down the line. The DME companies sold medically-unnecessary equipment based upon inadequate physician consultations, and these consultations were provided to patients whose names were sold illegally to the telemedicine company by an unscrupulous marketing group. Each party in the chain engaged in conduct amounting to Medicare fraud, wire fraud, and various other federal offenses, and now each party in the chain is at risk for substantial fines and long-term federal imprisonment.
Oberheiden, P.C.’s Health Care Fraud Defense Attorneys are Available for Telemedicine Investigations Nationwide
Are you a physician practicing telemedicine? Are you getting paid $25 to $40 per consultation, and do you have a high approval rate? Do you own a DME company, toxicology laboratory, or other medical business that earns substantial Medicare revenue through telemedicine? Do you own a telemedicine company or refer patients to telemedicine providers? Are you concerned about the recent indictments and wonder if you could be next?
At Oberheiden, P.C., we have a substantial track record of defending clients in telemedicine investigations. All of our attorneys have extensive Medicare fraud experience, and many of our lawyers served as health care fraud prosecutors with the DOJ prior to entering private practice. If you are involved in telemedicine in any capacity, you are at risk for being targeted by federal authorities, and an indictment could have devastating consequences for your business, your professional license, and your family.
Protecting Your Business or Practice with Strategic and Proactive Medicare Compliance
In addition to representing clients in telemedicine fraud investigations and prosecutions, we also represent marketing groups, telemedicine companies, physicians, toxicology laboratories, DME companies, and other clients with regard to proactive Medicare compliance. From maintaining adequate documentation of medical necessity to structuring financial relationships to avoid Anti-Kickback Statute implications, a comprehensive compliance program should go far beyond avoiding basic billing and coding mistakes. Relying on our experience protecting clients in federal telemedicine investigations across the country, we can help you develop and implement a compliance program that will withstand scrutiny by the federal government.
At Oberheiden, P.C., we offer:
- Centuries of experience in federal health care fraud matters, including Medicare investigations targeting telemedicine practice.
- An extensive and proven record of success in federal health care fraud investigations, grand jury proceedings, trials, and appeals.
- A defense team comprised exclusively of senior health care fraud defense lawyers, all of whom make themselves personally available to clients on an as-needed basis.
Speak with a Federal Health Care Fraud Defense Lawyer at Oberheiden, P.C.
If you are being targeted in a federal telemedicine investigation, if you have been indicted, or if you are hoping to avoid being indicted by enhancing your Medicare compliance program, we encourage you to get in touch. To speak with a member of our federal health care fraud defense team in confidence, call 8888-519-4897 or request a free initial consultation online now.