Telehealth Companies Face Repercussions for Medicare Fraud Scheme

The owner of Conclave Media (Conclave) and Nationwide Health Advocates (Nationwide) pleaded guilty to a telehealth fraud scheme that involved ordering medically unnecessary durable medical equipment (DME) on behalf of Medicare beneficiaries.

The charges against David Santana, 38, consisted of one count of conspiracy to commit healthcare fraud. Santana pleaded guilty to a $44 million telehealth fraud scheme that involved false ordering of DME such as braces and genetic tests.

This scheme was conducted through Conclave and Nationwide, companies owned by Santana. Between January 2018 and August 2021, Santana was accused of working with telemarketing companies that generated leads by targeting Medicare beneficiaries.

Conclave and Nationwide received payment from the telemarketers, which they used to order DME for beneficiaries. Santana also sought the assistance of medical staffing companies to gain the signatures of doctors and nurses on prepopulated orders.

Per the report, records falsely indicated that providers performed an examination of the patient. Santana extended signed orders to telemarketing companies, which then forwarded orders to DME providers.

Although a plea hearing has yet to be scheduled by the Court, there are various possible penalties Santana may face.

According to the press release, conspiracy to commit healthcare fraud involves penalties such as a 10-year prison sentence, supervised release of three years, and a $250,000 fine or double the gross pecuniary gain or loss, whichever is higher.

Telehealth fraud is common and can range in terms of action and consequence.

Like this case, a $64 million fraud scheme in May 2022 involved two telehealth company owners bribing doctors and soliciting from DME providers.

The company involved in the case, RediDoc, is a purported telehealth company. The owners of the company, Stephen Like and David Laughlin, allegedly submitted false claims to federal healthcare benefit programs. This action violates the Anti-Kickback Statute.

Pharmacies and DME providers paid bribes to marketing companies for drug prescriptions and DME orders. Marketing companies then extended Medicare and TRICARE beneficiary information, prescriptions, and DME orders to RediDoc.

The companies passed this information on to the bribed doctors who approved many of the medically unnecessary prescriptions, allowing RediDoc to bill pharmacies and DME providers. In total, Luke and Laughlin admitted to their scheme, which led to over $64 million in fraudulent claims submitted to healthcare benefit programs.

Another telehealth fraud scheme took place in April 2022. An orthopedic surgeon submitted false Medicare claims by signing prescriptions through telehealth services to access unneeded DME.

Having received $25 or $30 per patient encounter, false claims to Medicare totaled $10 million, according to the DOJ.

"Dishonest doctors who think Medicare is a cash cow and connect with telemedicine companies to brazenly steal from this vital taxpayer-funded program will find themselves arrested, prosecuted, and their scheme disconnected," stated United States Attorney for the Eastern District of New York, Breon Peace, in the press release.

These occurrences are examples of the prominence of fraud in telehealth, and the various routes people navigate to take advantage of this modality.