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DOJ Targets Laboratory Owner in Nationwide Telehealth Fraud Scheme

Federal prosecutors in Florida and Louisiana have filed multiple indictments related to a nationwide telemedicine fraud scheme involving genetic testing. The arrangement included at least 35 individuals and has resulted in the submission of more than $2.1 billion of fraudulent claims.

Earlier this week, federal prosecutors for the United States Department of Justice charged the CEO of LabSolutions, LLC, the owners of telemedicine companies Lotus Health, LLC, MedSymphony, LLC, and Meetmydocc, LLC, nine doctors, and several marketers with multiple counts of health care fraud and violations of the Anti-Kickback Statute for their involvement in a scheme relating to CGx testing, a genetic test that assesses predisposition to cancer. The indictments allege that the charged individuals targeted Medicare beneficiaries to order unnecessary CGx tests through telemarketing campaigns and health fairs. Telemedicine companies then received kickbacks used for purposes of paying physicians to issue orders for the tests that were either medically unnecessary or not eligible for Medicare reimbursement. Physicians who issued these requisition requests did so in the absence of treating a beneficiary for cancer or symptoms of cancer, did not use the test results in connection with treatment, did not conduct a proper telemedicine encounter, and often did not communicate with the beneficiaries at all. The CEO of LabSolutions paid co-conspirators as much as 50% of the laboratory’s Medicare reimbursement in exchange for each patient referral.

Frier Levitt expects the government’s targeted scrutiny and enforcement activities related to telemedicine to continue to increase. These arrangements are complex and require careful regulatory analysis to ensure compliance with law and to avoid violations of various federal and state laws, which may result in criminal or civil penalties and other sanctions. Contact Frier Levitt for guidance and review of your proposed or current telemedicine model.