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Loosening the Rules on Telehealth to Fight Coronavirus May Also Result in New Medicare Fraud Schemes

Posted  March 27, 2020

In response to the coronavirus pandemic, the U.S. government is loosening rules on telehealth to make it easier—and safer—for patients to speak to their healthcare providers.  These steps are an important, and necessary, step to curtail the spread of the virus and to facilitate the treatment of infected patients.  But it may also open the door to new telehealth fraud schemes by unscrupulous individuals and businesses.

Changes to Telehealth Regulations by CMS

On March 6, 2020, Congress enacted the Coronavirus Preparedness and Response Supplemental Appropriations Act, which includes a provision permitting the Secretary of the Department of Health and Human Services to waive certain Medicare telehealth payment requirements during the coronavirus public health emergency.  Pursuant to this authority, as described in a fact sheet, CMS has made the following temporary changes to the Medicare Part B telehealth program.  These changes apply to all patients enrolled in traditional Medicare, not just those with Covid-19 symptoms or diagnosis.

    • Unlimited Geographic Scope: Clinicians can now be paid for providing telehealth services to Medicare beneficiaries residing across the entire country, not only in rural or other healthcare professional shortage areas.
    • Telehealth from Home Okay: Medicare beneficiaries no longer need to travel to a particular healthcare facility to receive telehealth services, but may participate from any setting, including from their home.
    • Identical Reimbursement to In-Person: Clinicians can now bill for telehealth services at the same amount as in-person services.
    • Looser Licensing Requirements: Out-of-state clinicians no longer must be licensed in the state where they are providing telehealth services, so long as they are otherwise a qualified provider and have an equivalent license in another state.
    • More Flexibility to Waive Co-Pays: Qualified providers now have greater flexibility to reduce or waive patients’ cost-sharing obligations for telehealth visits, without fear of violating the Anti-Kickback Statute.
    • No Physician Prior Relationship Required: Pursuant to its enforcement discretion, HHS will not conduct audits to ensure that a prior relationship existed between a patient and a healthcare provider before telehealth services are provided.
    • More Communication Technologies Allowed: Likewise, to make it easier for patients to access their clinicians, the HHS Office of Civil Rights will waive penalties for HIPAA violations against qualified providers who serve patients in good faith through everyday communications technologies, such as FaceTime or Skype.

These changes apply to all patients enrolled in the Medicare program and will be in effect until the public health emergency office declared on January 31, 2020 ends.  Some states are making similar changes to their Medicaid programs to expand the use of telemedicine.  But telehealth services, like all Medicare and Medicaid services, must still be reasonable and necessary to be reimbursable.

Changes to Telehealth Regulations by the FCC

The Federal Communications Commission has also made some regulatory changes to facilitate the use of telehealth during the coronavirus outbreak.  Specifically, on March 18, 2020, the FCC waived Rural Health Care (RHC) and E-Rate program rules to permit telecommunication providers to offer, and eligible healthcare providers to solicit and accept, various gifts, including but not limited to free upgrades to connections, connected devices, equipment, and other services for RHC program participants who provide care via telemedicine.  In the past, the federal government has viewed such gifts as potential violations of the Anti-Kickback Statute.

What these Regulatory Changes Mean for Whistleblowers

The above CMS and FCC regulatory changes should have no effect on well-pleaded complaints filed by whistleblowers involving allegations of fraudulent use or billing of telehealth before the coronavirus crisis.  The regulatory framework in place at the time of the misconduct will control whether an Anti-Kickback Statute or False Claims Act violation occurred.  However, conduct that might have constituted an FCA violation before the regulatory changes went into effect might not qualify as an FCA violation if the conduct occurs now.  But, by the same token, the new regulatory framework may incentivize new fraud schemes that have not occurred before, such as the widespread targeting of coronavirus patients, billing for bogus coronavirus treatments, or the wholesale billing of telehealth services for any and all manner of care.

If you have information that a person or company is defrauding government healthcare programs and would like to speak to an attorney about whether you have a whistleblower case, please contact us confidentially.


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