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Telehealth Boomed During the Pandemic - and so Did Telehealth Fraud

Posted  August 24, 2022
By Hallie Noecker, Max Voldman

Prior to the pandemic, telehealth was basically nonexistent, with one study clocking the percentage of “virtual” doctors’ visits before Covid-19 at zero percent. At the time, America’s largest insurer, Medicare, only covered telemedicine in limited circumstances that usually still involved a visit to a healthcare facility. Medicare’s coverage limitations demonstrated the Department of Health and Human Services’ (HHS) concerns that expanding telehealth would lead to a proliferation of fraud schemes, costing taxpayers millions, or even billions, of dollars. Those concerns stemmed from Medicare’s first forays into telehealth, such as offering coverage when providers prescribed durable medical equipment like braces without physical visits, which led to a bonanza of fraud. HHS had good reason to be wary.

But, as with nearly all aspects of our lives, the pandemic disrupted Medicare’s best laid plans. With lockdowns, stay-at-home orders, concerns of contagion, and overloaded health systems, telehealth quickly became the most practical way to see a doctor without risking exposure to unnecessary health risks and adding to the overburdened healthcare system. In response, HHS modified telehealth rules. Since then, Medicare visits conducted through telehealth increased from approximately 840,000 in 2019 to 52.7 million in 2020, a sixty-fold increase, according to a report by HHS. While these numbers have dropped somewhat now, new infrastructure developed to reduce in-person doctors’ visits, and shifting norms around conducting business virtually have meant that tele-visits still made up approximately 8 percent of all outpatient doctor’s visits as of August 2021.

Telehealth is Here to Stay

It’s clear that telehealth is here to stay and will be a key component of the healthcare ecosystem going forward. It’s convenient, cost effective, and expanding. But telehealth also harbors a dark side: it’s fraud riddled, with one federal prosecutor noting that scams are spreading “like wildfire.” The HHS Inspector General has already conducted “dozens” of investigations into fraud schemes linked to telehealth providers, telemedicine, and telemarketing services. Kickbacks, billing for visits that never happened, and billing for unnecessary services or medications are among the issues already uncovered. But with so much of telehealth happening between providers and patients in a confidential environment, how can bad actors be rooted out? How do we ensure Medicare is not bankrupted?

Whistleblowers Can Report Telehealth Fraud

The answer of how to root out bad actors in telehealth is the same answer that has saved HHS over $40 billion: whistleblowers, coupled with greater oversight and enforcement. The False Claims Act is a federal law that allows whistleblowers to step up and sue in the name of the government, alleging that a government contractor is defrauding taxpayers, and share in the government’s recovery. The law has recovered over $40 billion in healthcare funds since it was revitalized in 1986, with over 80% of the dollars recovered flowing from cases brought by whistleblowers.

Whistleblowers have already helped recoup dollars lost to telehealth scams, such as a $24.5 million recovery from a Florida provider group, resolving allegations that kickbacks led to redundant, unnecessary tests. Other common schemes might include prescribing drugs or services to patients a telehealth provider has hardly seen, paying volume-based bonuses for telehealth drug or equipment prescriptions, and forging records for visits that never happened.

The need for whistleblowers in healthcare is widely acknowledged, and the government is already listening in this new arena. The Office of the Inspector General has issued warnings specific to telehealth fraud, calling out enforcement under the False Claims Act to encourage people who know of wrongdoing to come forward. And Justice Department officials are predicting an explosion of enforcement actions under the law in coming years, noting that most of the schemes are complex and involve money laundering or other disguising of ill-gotten gains. That makes those with insider knowledge more essential than ever.

As with most new frontiers involving massive government spending, telemedicine is a target for the unprincipled looking to get rich quick. Whistleblowers are Medicare’s best hope of detecting and deterring fraud happening behind a Zoom screen. So, if you see something, say something. The government is listening and billions of taxpayer dollars, along with the solvency of the Medicare program, are at stake.

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Tagged in: COVID-19, FCA Federal, Healthcare Fraud, Importance of Whistleblowers, Medicare, Provider Fraud,