Department of Justice Enforcement Actions Against Physicians Participating in Dubious Telemedicine Arrangements

On September 30, 2020, the Department of Justice (“DOJ”) announced a nationwide healthcare fraud and opioid takedown resulting in charges against more than 100 physicians for over $4.5 billion in losses connected to allegedly fraudulent telemedicine arrangements. “Telemedicine” generally refers to the provision of remote health care services through utilization of telecommunication technologies. While telemedicine can be a useful and convenient option for rendering healthcare services, it has received increased scrutiny by the government in recent years. As such, physicians involved in telemedicine arrangements must be vigilant and keenly aware of the legal minefields surrounding the practice of telemedicine, especially in light of the prism of suspicion the federal government frequently views telemedicine arrangements. Given the government’s perception that telemedicine is ripe for fraud and abuse, providers must tread cautiously when engaging in telemedicine arrangements.

In the aforementioned telemedicine scheme, defendant physicians allegedly received payments from telemedicine companies in exchange for prescribing medically unnecessary durable medical equipment (“DME”), genetic and other diagnostic testing, and pain medications either absent a patient encounter or with only a brief telephonic conversation with patients they had never seen or met. DME companies, laboratories, and pharmacies were alleged to have then purchased those prescription orders by paying illegal kickbacks and bribes, and to have submitted false claims to Medicare and other government insurers. CMS revoked the Medicare billing privileges of 256 medical professionals involved in the scheme.

Many of these physicians now face criminal and civil charges for their involvement in this fraudulent telemedicine scheme; however, they are certainly not the first of their kind. For example, in April 2019, several physicians were charged in a $1.2 billion health care fraud conspiracy for receiving illegal kickbacks and bribes to conduct sham telemedicine encounters and sign orders for medically unnecessary DME.

Physicians have also been charged for their involvement in suspect telemedicine arrangements under alternative theories of liability. In September 2020, for example, a physician pled guilty to obstructing a federal healthcare investigation after admitting that she misled the government regarding her involvement with several telemedicine companies. In early interviews with government agents, the physician claimed that she always evaluated telemedicine patients before determining whether or not to order compounded prescription drugs or DME. She later admitted that on repeated occasions she ordered the products without first consulting patients. The physician agreed to forfeit $33,000 in telemedicine proceeds and pay a $180,000 fine.

It is evident that the government is becoming increasingly eager to prosecute physicians involved in fraudulent telemedicine schemes. If you are a physician utilizing telemedicine, you must ensure that your arrangement complies with both applicable state and federal law. Federal laws most often triggered by telemedicine arrangements include the Anti-Kickback Statute, the Stark self-referral law, and the False Claims Act; however, Health Care Fraud, Wire Fraud, and conspiracy to violate any of these aforementioned laws are also within the Government’s arsenal.

Physicians and other providers with prescriptive authority are often lured into dubious telemedicine arrangements by actors that have created elaborate, and impressive, websites that not only seem legitimate, but appear to be at the forefront of telemedicine. Believing that a telemedicine company is a legitimate enterprise operated by sophisticated business-people providers often sign up without even having an attorney review the arrangement. Time and again we have witnessed generally well-meaning and qualified physicians swept into government investigations, frequently resulting is financial penalties and loss of licensure, and in worst cases, criminal indictment. 

How Frier Levitt Can Help

While telemedicine is a valuable tool, physicians engaging in telemedicine must ensure they do not run afoul of the many complex federal and state laws governing telemedicine. Frier Levitt routinely assists physicians in structuring, or restructuring, telemedicine arrangements, and also defends physicians, and other providers, facing investigation related to allegedly precarious telemedicine arrangements. Contact us today to speak to an attorney.

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