DOJ Files Criminal Charges in Telemedicine Fraud Schemes Totaling $1.2B
Thirty-six defendants were charged in the schemes, which involved telehealth providers ordering unnecessary genetic tests and durable medical equipment in exchange for kickbacks.
The Department of Justice (DOJ) has filed criminal charges against 36 defendants in telemedicine-enabled fraud schemes involving illegal kickbacks for genetic testing and durable medical equipment (DME) that led to losses of more than $1.2 billion.
The defendants include a telemedicine company executive and the owners and executives of several clinical laboratories, durable medical equipment companies, marketing organizations, and healthcare professionals. They span 13 federal districts across the country.
The fraud scheme involved providers at the telemedicine company ordering medically unnecessary tests or DME for patients in exchange for kickbacks from clinical laboratories and DME companies. The orders were made without the doctor interacting with the patient or only interacting with them through a brief telephone call.
"Protecting the American people is at the forefront of the FBI’s mission," said Luis Quesada, assistant director of the Federal Bureau of Investigation's (FBI) Criminal Investigative Division, in a press release. "Fraudsters and scammers take advantage of telemedicine and use it as a platform to orchestrate their criminal schemes."
The charges also represent among the first prosecutions in the nation related to fraudulent cardiovascular genetic testing.
In one case that is part of the enforcement action, the operator of several clinical laboratories has been charged for paying over $16 million to marketers who then paid kickbacks to telemedicine companies and call centers in exchange for doctors' orders for cardiovascular and cancer genetic testing. These orders were used to submit more than $174 million in false claims to Medicare, but the results of the tests were not used to treat patients.
The defendant allegedly spent the proceeds of the scheme on luxury vehicles, a yacht, and real estate, according to the DOJ.
But, in connection with the DOJ's enforcement action, the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity seized more than $8 million in cash and other proceeds from the schemes through administrative actions.
"The Department of Justice is committed to prosecuting people who abuse our healthcare system and exploit telemedicine technologies in fraud and bribery schemes," said Assistant Attorney General Kenneth A. Polite, Jr., of the DOJ's Criminal Division, in a press release.
As telehealth use remains high relative to pre-pandemic levels, federal enforcement agencies are cracking down on fraud, waste, and abuse.
In April, a New York-based orthopedic surgeon was charged in connection with a telemedicine fraud scheme that allegedly involved the use of false claims to bilk Medicare out of $10 million.
Last year, a telemedicine company owner pleaded guilty to a scheme where they paid and received kickback payments for unnecessary cancer genomic testing. Medicare and Medicaid programs lost millions of dollars through fraudulent reimbursement claims.
Earlier this week, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a special fraud alert that offers healthcare practitioners guidance when collaborating with telehealth companies. It included a list of suspicious characteristics of telehealth arrangements, such as instances where a telehealth company reimburses a practitioner according to the number of services ordered.
