OIG Identifies Fraudulent Billing for Telehealth Services During the COVID-19 Pandemic

Earlier this month, the Department of Health and Human Services Office of Inspector General (“OIG”) released a data brief that identified potential concerns of fraud, waste, or abuse in telehealth services delivered during the first year of the COVID-19 pandemic, as well as made recommendations to the Centers for Medicare and Medicaid Services (“CMS”) to improve program integrity in this area.

In compiling its data brief, the OIG analyzed Medicare data from March 1, 2020, to February 28, 2021, focusing on the approximately 742,000 providers who billed for telehealth services during this period. Using input from OIG investigators, the OIG developed a non-exhaustive list of seven criteria that “focus on different types of billing that providers may use to inappropriately bill for telehealth services.” The seven criteria are as follows:

  1. billing both a telehealth service and a facility fee for most visits;
  2. billing telehealth services at the highest, most expensive level every time;
  3. billing telehealth services for a high number of days in a year;
  4. billing both Medicare fee-for-service and a Medicare Advantage plan for the same service for a high proportion of services;
  5. billing a high average number of hours of telehealth services per visit;
  6. billing telehealth services for a high number of beneficiaries; and
  7. billing for a telehealth service and ordering medical equipment for a significant proportion of beneficiaries.

The OIG identified 1,714 high-risk providers who met at least one of the seven criteria, accounting for $127.7 million in services provided to approximately half a million beneficiaries. While these providers appear to represent a small portion of the overall number of providers using telehealth, the low number of problematic providers may not reflect the extent of the problem. The agency deliberately set a high bar for its thresholds and noted that the providers identified by the review represented extreme cases. Nonetheless, the OIG contends that its “findings demonstrate the importance of strong, targeted oversight of telehealth services.”

Based on its findings, the OIG made recommendations to the CMS to “(1) strengthen monitoring and targeted oversight of telehealth services, (2) provide additional education to providers on appropriate billing for telehealth services, (3) improve the transparency of ‘incident to’ services when clinical staff primarily delivered the telehealth service, (4) identify telehealth companies that bill Medicare, and (5) follow up on the providers identified in this report.”

In light of the foregoing, providers rendering care to Medicare beneficiaries via telehealth should take steps to confirm that their practices comport not only with applicable laws related to kickbacks, corporate practice of medicine, fee splitting, and self-referral, but also to relevant billing guidelines. Even practices that are not submitting claims for payment for their telehealth services are encouraged to seek counsel to ensure that they are complying with licensing board requirements and that their models are not otherwise triggering CMS requirements. For example, Frier Levitt has observed many circumstances in which physicians engaged in telehealth ancillary to their full-time practices bill “cash” for a telehealth encounter, but face adverse action from CMS after patients use insurance benefits for prescription drug or durable medical equipment claims.

How Frier Levitt Can Help

This review and the OIG’s recommendations to CMS indicate a continuing focus on identifying and prosecuting fraud, waste, or abuse related to both telehealth and the COVID-19 pandemic. Frier Levitt attorneys have advised practitioners, ancillary providers, marketers, and technology companies on developing and restructuring telehealth business models to comply with applicable law while considering obstacles such as licensing, prescribing, and insurance reimbursement concerns that are unique to each arrangement. Our attorneys also represent clients in connection with criminal investigations and prosecutions and civil and administrative actions involving allegations of unlawful prescribing, issuance or receipt of payments, and/or filling of prescriptions and orders associated with virtual health models. If you are seeking to Launch a Telemedicine Practice or Telehealth Startup, want to ensure your compliance in an existing model, or have received a subpoena or other investigative demand – or have otherwise been put on notice you may be under investigation – in connection with your participation in a telehealth arrangement, contact us to speak to an experienced telehealth attorney.