Client Alert: Anti-Kickback Statute Violations in Telemedicine

In its ongoing effort to combat healthcare fraud, the Department of Justice (“DOJ”) arrested and charged a New York orthopedic surgeon for allegedly submitting approximately $10 million in fraudulent claims to Medicare on April 21, 2022. These alleged false claims stemmed from the physician’s receipt of kickbacks from various telemedicine companies.

According to the DOJ’s press release, the healthcare provider is accused of prescribing durable medical equipment (“DME”) items, such as orthotic braces, that were not medically necessary. Notably, the allegations highlight that he was induced to do so through bribes from a number of telehealth companies. Specifically, the DOJ alleges that the prescriber would have a very brief telephone conversation with his patients, often lasting less than three minutes. He would then issue unnecessary DME prescriptions without performing physical examinations and/or evaluations. In exchange, telemedicine companies paid the doctor between $25 to $30 per consultation. These payments, although relatively small, are clearly prohibited by the Anti-Kickback Statute, as they constitute improper remuneration, and any claims submitted to government payors as a result of these consultations tainted by kickbacks can potentially constitute healthcare fraud. If convicted, the prescriber faces up to ten (10) years in prison.

With the practice of telemedicine on the rise, this enforcement action underscores the necessity for healthcare providers utilizing it to remain vigilant and ensure strict compliance with all state and federal healthcare laws. More importantly, potentially suspect telemedicine arrangements involving improper fee agreements that could result in medically unnecessary equipment and/or services billed to government payors, such as Medicare, Medicaid, and/or TRICARE, will continue to be the focus of many government investigations. We have previously discussed the telemedicine trend and potential enforcement activities as they relate to medically unnecessary laboratory testing referrals, and medically unnecessary durable medical equipment prescriptions, here, here, and here.

How Frier Levitt Can Help

The attorneys at Frier Levitt have extensive experience with telemedicine and the federal and statute statutes regulating it. Frier Levitt’s transactional attorneys are well-equipped to proactively identify and manage all types of risk related to telemedicine contracts, and its White Collar and Government Defense Team stands ready to assist in remediating instances of noncompliance, respond to government’s inquiries and/or criminal investigations on your behalf, and, if necessary, put forth a rigorous defense in any civil or criminal action filed against you or your healthcare business.