Red Flags to Watch for When Entering Into Telemedicine Payment Arrangements

The U.S. Department of Health and Human Services Office of the Inspector General cautions practitioners to exercise caution when entering into arrangements with purported telemedicine companies.  We have seen multiple instances of physicians and other healthcare practitioners being paid kickbacks to generate orders or prescriptions for medically unnecessary durable medical equipment, genetic testing, wound care items, or prescription medications, resulting in submissions of fraudulent claims to healthcare programs.  We have talked to patients who stated they simply answered "yes" to a marketer that they had back pain, and shortly thereafter received compounded creams that they did not even realize they were prescribed.  Many of these patients state they never spoke with a physician before receiving the creams.

The OIG shares seven red flags to watch for:

  1. The patients for whom a practitioner orders or prescribes items or services are identified or recruited by a Telemedicine Company, sales agent, recruiter, call center, or health fair, and/or through internet, television, or social media advertising for free or low-cost out-of-pocket items or services.
  2. A Practitioner does not have sufficient contact with or information from the purported patient to meaningfully assess the medical necessity of the items or services ordered or prescribed.
  3. A Telemedicine Company compensates a Practitioner based on the volume of items or services ordered or prescribed, which may be characterized to the Practitioner as compensation based on the number of medical records that the Practitioner reviewed.
  4. A Telemedicine Company furnishes items and services only to federal healthcare program beneficiaries and does not accept insurance from any other payor.
  5. A Telemedicine Company claims to furnish items and services only to individuals who are not federal healthcare program beneficiaries but may, in fact, bill federal healthcare programs.
  6. A Telemedicine Company only furnishes one product or a single class of products (e.g., durable medical equipment, genetic testing, diabetic supplies, or various prescription creams), potentially restricting a Practitioner’s treatment options to a predetermined course of treatment.
  7. A Telemedicine Company does not expect Practitioners to follow up with patients, nor does it provide Practitioners with the information required to follow up with patients (e.g., the Telemedicine Company does not require Practitioners to discuss genetic testing results with each purported patient).

The Board and Commission join the OIG in warning physicians about these illegal schemes. Often, once the illegal activity comes to the attention of insurance companies or law enforcement, the telehealth company folds, declares bankruptcy, and moves elsewhere, leaving the physicians with possibly career-ending liability and investigations into their medical practices.

Read the whole report here