I. Telehealth and Its Development Over the Years
Telehealth uses electronic information and communication technology that allows patients to access medical services without physically going into a medical facility. Services available through telehealth platforms include video-conference consultation with medical providers, remote monitoring of patients’ health conditions, prescription of medication, and online mental health counseling. Telehealth has a long history going back to the late 19th and early 20th centuries when telephones and radios were first invented. A 1925 issue of Science and Invention magazine depicted a doctor diagnosing their patient using radio on its cover. By the late 1990s and early 2000s, the availability of internet and personal computers further facilitated virtual communication between providers and patients through real-time video consultation and online exchange of information. Over the years, development in telecommunication technology and electronic record systems increasingly shifted in-person health services to virtual platforms. Telehealth also has certain advantages over traditional in-person medical service delivery methods, such as better accessibility for residents in rural areas. Indeed, legislation trends reflect telehealth’s rise in popularity – by 2015, 27 states had enacted laws that permitted delivery of primary care services through telehealth.
II. Medicaid and Medicare Expansion of Telehealth Coverage During COVID-19
The onset of the COVID-19 pandemic has further popularized telehealth services. Due to quarantine rules and social distancing precautions, telehealth became an especially appealing alternative to in-person doctor visits, and sometimes the only alternative for those who no longer had access to in-office medical care. As a result, telehealth prevalence increased drastically during the pandemic. One study of private insurance claims showed that telehealth claims increased by 766% during the first three months of the pandemic. Before the pandemic, only about 15% of physicians used any form of telehealth in their office, but in 2021, this number has increased to 87%. This expansion of telehealth services suggests that telehealth will remain an integral part of the American healthcare system post-COVID.
Despite its many benefits, telehealth’s rise in popularity has also been accompanied by surges in Medicaid and Medicare fraud. In March 2020, the Coronavirus Preparedness and Response Supplemental Appropriations Act was passed to allow the Department of Health and Human Services (HHS) to waive certain telehealth payment requirements for Medicare. Subsequently, Centers for Medicaid and Medicare Services (CMS) also gave the states more flexibility and encouraged them to expand Medicaid telehealth programs and repayments. As a result, Medicare and Medicaid enrollees’ telehealth reimbursement claims drastically increased, and so did fraud risks. Federal investigations revealed that $128 million of Medicare high fraud risk claims were billed by providers during the first year of the pandemic alone.
III. Types of Telehealth Fraud
While Medicaid and Medicare telehealth fraud schemes often vary in form and size, they tend to fall into four categories: upcoding, billing for services not provided, misrepresentation of services rendered, and kickbacks. Healthcare professionals or business entities may be held liable for any of these fraudulent activities under the False Claim Act.
1. Upcoding
Upcoding refers to a provider billing insurance for a more time-intensive or complex service than the one provided. The providers thereby falsely represent to Medicaid or Medicare the type or duration of the service they provided to receive higher reimbursement.
2. Billing for Services not Provided
This type of telehealth fraud occurs when providers bill insurance for services that they did not provide to their patients. In some situations, services were provided, but they were inadequate or ineffective to qualify for reimbursement under Medicaid and Medicare standards. For example, telehealth services with video-conferencing features without stable video or audio connection may not qualify for reimbursement. Submitting such claims to Medicaid or Medicare, even after a good-faith effort to provide qualifying care, would be a violation of the False Claim Act.
3. Misrepresentation of Services Rendered
Medicaid and Medicare coverage, even after its expansion, includes certain limits on the types of virtual services. Misrepresentation of services rendered means providers falsely represent non-qualifying services they performed as qualifying to Medicaid and Medicare to get reimbursement.
4. Kickbacks
Telehealth can be incorporated into traditional medical kickback schemes to commit fraud. In many cases, pharmaceutical or medical device companies pay healthcare providers to refer patients to their products or services. In some instances, patients are not even aware of the fact that they were prescribed or received certain products, devices, or services because the interaction between doctors and third-party service or product providers is short and minimal. The third parties would then try to charge Medicaid and Medicare programs for these services or products that they did actually not provide. This practice violates the federal Anti-Kickback statute.
IV. DOJ and OIG’s Crackdown of Telehealth Fraud Schemes
With COVID-19 fading into the background, the Department of Justice (DOJ) is keeping up its effort to investigate healthcare-related fraud. In 2023, DOJ’s settlement and judgments of healthcare-related violations reached $1.8 billion. Partnering with the HHS’ Office of Inspector General (OIG), the DOJ continues to bring telehealth fraud criminal and civil actions. In May 2024, Daniel Hurt, owner and operator of numerous healthcare services, reached a $27 million settlement with the DOJ for violations of the False Claim Act. Hurt had previously pleaded guilty to criminal charges of telehealth fraud kickback schemes involving Medicare reimbursements for unnecessary or unperformed cancer genetic testing services. He was sentenced to a 10-year imprisonment. Such heightened scrutiny will likely continue over the next few years as the DOJ continues to investigate high-risk Medicaid and Medicare claims filed during and post-COVID-19.