How to Keep Your Medical Practice Safe from Telemedicine Fraud

How to Keep Your Medical Practice Safe from Telemedicine Fraud

Last updated on November 2nd, 2022

Now that the Biden Administration has extended the Public Health Emergency (PHE) for another three months through January 11, Federal regulations put in place for the duration of the PHE continue, including those governing telemedicine. What’s more, certain telemedicine flexibilities will continue for five months after the PHE ends. While this may prompt a collective sigh of relief from all parties that benefit from the relaxed regulations, the need for heightened vigilance remains due to significant fraud.

As the COVID crisis escalated, so did the role of telemedicine. Patients weren’t the only ones who benefited. As reported on, “Unscrupulous international and domestic telemarketing call centers, staffing companies, marketers, brokers and practitioners, among other individuals and entities, have recognized the potential to line their pockets, and many have done so—and continue to do so.”

In late July, the U.S. Department of Justice filed criminal charges against 36 defendants – including health care professionals, durable medical equipment (DME) companies, marketing organizations, a telemedicine company executive, and clinical laboratory owners and executives — for more than $1.2 billion in fraud, of which $1 billion related to telemedicine. At the same time, the U.S. Department of Health and Human Resources Office of the Inspector General (OIG) issued a fraud alert, encouraging medical practices and practitioners to proceed with caution.

Signs that there could be fraud involved include:

  • Patients – who are oftentimes the elderly or disabled – are solicited via the internet, TV, social media, telemarketing or sales agents, and via other channels for free or low-cost care, items or services they don’t need. For example, these patients are duped into going for cardiovascular genetic testing and prescribed products that aren’t used in their treatment.
  • The medical practitioner doesn’t have enough information or patient contact to assess medical necessity of items ordered or prescribed (i.e., prescriptions, DMEs, tests, or wound care supplies). He/she is compensated based on the number of medical records reviewed and/or volume of items or services ordered or prescribed, but is given no way to follow up with a patient or on treatment.
  • The telemedicine company only accepts Medicare, Medicaid and other federal insurance, but no private insurance; says they don’t serve Medicare/Medicaid covered individuals but then bill those programs; or only provides one product/class of products (i.e., DME), predetermining the course of treatment and limiting treatment options.

Going a step further, the OIG reviewed over 700,000 telemedicine billing records from the first year of the pandemic and identified seven red flags in billing that could indicate fraud.

The DOJ continues to prosecute providers for fraud and whistleblowers can reap significant rewards. Even senior citizens are being educated about telemedicine fraud and how to report it.

It’s evident that telemedicine is here to stay. While New York’s Governor Hochul ended the PHE in the state earlier this month, she also showed her support of telemedicine as a valuable health care delivery channel by introducing a $3 million grant program to “invest in new technologies that will improve access and adoption of telehealth in underserved communities.” The state also launched online training programs to help medical providers learn best practices for adopting telemedicine.

For more information,  please see the Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution When Entering Into Arrangements With Purported Telemedicine Companies.

As you continue navigating the ever-changing healthcare landscape and regulations, RBT CPAs is here to help you navigate ever-changing accounting, audit, and tax requirements. We’re one of the largest CPA firms in the Hudson Valley, providing professional, ethical and quality services for over 55 years. We believe we succeed when we help our clients succeed. If you need a partner you can trust to handle your accounting, audit, and tax needs so you’re freed up to focus on other things like the healthcare landscape and changing regulations, give us a call.