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24 Indicted in Telemedicine Fraud Scheme

Twenty-four individuals have been charged in a health care fraud scheme that resulted in a $1.2 billion loss to federal health care programs. The charges target those involved in a conspiracy affecting Medicare beneficiaries. Call centers were used to generate beneficiary leads, each of whom was promised free or low-cost durable medical equipment. The call centers then submitted kickbacks to telemedicine companies to facilitate the issuance of a DME order for the qualified lead. These telehealth companies paid contracted physicians to conduct sham telemedicine encounters, sometimes based on brief phone calls or no contact with the patient at all, and issue the DME order. Finally, the orders were directed to the originating call centers, which sold the DME orders to suppliers that fraudulently billed Medicare.

The indictments span several states and include charges against the physicians and suppliers involved in the arrangement, as well as the principals and executives of the telemedicine companies. Additionally, as a result of the investigation, the Center for Medicare Services took administrative action against 130 DME companies involved in the scheme, suspending the companies’ ability to submit claims for payment.

The attorneys at Frier Levitt have reviewed many arrangements similar to those described in the indictments, and have consistently directed clients away from these dubious models. Enforcement action involving telemedicine arrangements has risen and will continue to do so. These trends reinforce the importance of consulting competent healthcare counsel before developing or participating in telehealth business models. If you are considering incorporating telemedicine into your business, contact Frier Levitt for assistance.