On May 3, 2021, the Department of Justice announced that the owners of a Florida telemarketing company were charged for their alleged participation in a $46 million genetic testing telehealth scheme. The Department of Justice alleges that the individuals used telemarketing to target Medicare beneficiaries for unnecessary genetic cancer tests. In furtherance of the scheme, the individuals offered and paid illegal kickbacks and bribes to telehealth companies in exchange for doctors’ orders for the genetic tests. Finally, the individuals sold the unnecessary orders to laboratories, who ultimately billed Medicare for the tests.
Of note, the lab orders were written by telehealth physicians who had no prior relationship with the beneficiaries and who did not use the test results in furtherance of their treatment of the beneficiary. Moreover, the Department alleges that the telehealth encounters conducted by the physicians did not comport with the requirements of applicable law.
As a result of the scheme, the Department alleges that one lab, alone, billed Medicare for $46 million in claims, of which over $27 million was paid. In exchange for the referrals, the lab paid kickbacks to the telemarketers totaling over $14 million.
The indictment charges two of the individuals with one count of conspiracy to commit health care fraud, one count of conspiracy to pay and receive kickbacks, multiple counts of substantive health care fraud and kickback offenses, conspiracy to commit money laundering, and substantive counts of money laundering offenses. A third individual was charged with one count of conspiracy to pay and receive kickbacks and one substantive count of receipt of kickbacks for his alleged role in this scheme. The counts charging conspiracy to commit health care fraud and wire fraud count, conspiracy to commit money laundering, and substantive money laundering are each punishable by a maximum potential penalty of 20 years in prison. The counts charging health care fraud and anti-kickback violations are each punishable by a maximum potential penalty of 10 years in prison.
Aggressive telehealth-related enforcement remains a priority for the Department of Justice. Although the indictment announced yesterday focuses solely on the telemarketing company owners, additional individuals and entities involved in the scheme, including the laboratories, telehealth companies and physicians, may also face prosecution. As noted in its press release, the Department and its federal partners are “taking steps to increase accountability and decrease the presence of fraudulent providers.”
How Frier Levitt Can Help
Complex healthcare transactions, particularly marketing and telehealth arrangements, often present a variety of regulatory concerns that can give rise to both civil and criminal liability. Frier Levitt has extensive experience advising healthcare providers and related stakeholders in complying with the myriad of healthcare regulations affecting the industry. In addition to proactively structuring arrangements in a compliant fashion, Frier Levitt represents individuals and entities already facing civil or criminal government investigations. Contact us for assistance in evaluating the regulatory compliance of your marketing and telehealth relationships.
