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Thanks to the COVID-19 pandemic, telehealth usage significantly increased across the country in 2020. More doctors found it to be an acceptable way to connect with their patients and incentives finally lined up with the technology’s capabilities, as CMS and private payers temporarily offered flexible reimbursement and cross-state licensure.

For those reasons, the October announcement by the Department of Justice that it was charging 86 defendants with telehealth fraud should not have surprised anyone in the industry. Erin Hoyle, a lawyer with Carlton Fields, focuses her practice on False Claims Act (qui tam/whistleblower) defense, corporate internal investigations, white collar criminal defense, cybersecurity and privacy. She says when the money flows in health care, especially during a national emergency, enforcement of fraud will soon follow.

“With the COVID-19 pandemic, [the health care industry] received significant monetary distribution in federal money to ramp up these telehealth services. What you typically see is once enforcement agencies get their feet under them, they will begin looking for bad actors because they recognize it’s very important to ensure program integrity when there are large sums of money at play and patient safety is an issue,” says Hoyle.

The DOJ, along with Health and Human Services’ Office of the Inspector General (OIG) and other agencies, charged 86 defendants with $4.5 billion in telehealth fraud. The charges allege telemedicine executives paid doctors and nurse practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen.

This is only the beginning of the enforcement, says Amy Lerman, who is with the Health Care and Life Sciences practice at Epstein Becker Green. “The OIGs, the DOJs of the world, they’re looking now. They know a lot better than they did 2-3 years ago what to look for, the schemes that are being run,” says Lerman, who predicts regulators will focus on the type of kickback ploys that came up in the October bust. She also wouldn’t be surprised if they examine other potential areas of vulnerability to fraud.

“Payers and government entities are really looking very closely because there’s such an uptick in telemedicine services. They’re looking for the ways that people may not be doing the billing and collection aspect of their business correctly,” she says.

No mistake goes unnoticed

Kyle Zebley, ATA director of public policy, says that the advocacy group expects increased oversight from the government and other payers as usage of the technology increases. However, he says there is a clear difference between organizations acting with intent and those who are trying to keep up with the changing rules and that needs to be a consideration by fraud watchdogs.

“There are people who are new in this space, expanding their presence and trying to keep up with the evolving laws and regulations. We think government should understand this factor when trying to bring oversight and attention to telehealth fraud. That needs to be considered,” says Zebley.

Government regulators may not be that forgiving though, even as providers are trying to keep up with the changing rules. Hoyle says that “failure to comply with billing and documentation requirement will be huge.” She points to an example from last year, in the height of the pandemic, that shows how serious CMS and others are taking telehealth fraud.

“In late spring to early summer, my colleagues and I witnessed a flurry of audit requests coming out from CMS contractors to providers who had been involved with telehealth durable medical equipment [DME] companies over the past few years. They had been working with DME companies that had been taken out in an April 2019 [Justice Department indictment]. The providers were no longer providing services in the DME space, but a year later they received an audit request for a very small patient population, about 20 patients. For a variety of reasons, some of these providers may have not been able to provide those records,” says Hoyle. “In one case, this failure to provide documentation resulted in a revocation of Medicare billing privileges and a ten-year re-enrollment bar.”

The moral of the story, she says, is that the smallest telehealth compliance details cannot be ignored. The fact that a provider lost CMS billing privileges in the middle of a pandemic shows Hoyle that the government is serious about telehealth fraud.