Telemedicine Fraud Scheme, Faulty Prescriptions Led to $37M in Losses

Four individuals have been charged for their involvement in a telemedicine fraud scheme that swindled public and private payers out of $37 million through the generation of unnecessary prescriptions and the use of kickback payments.

David Woroboff of Del Rey, California, George Willard of Brooklyn, Michigan, Randall Mills of Plano, Texas, and Dr. Le Thu, a licensed physician from South Bridge, Massachusetts, have each been indicted on one count of conspiracy to commit healthcare fraud and one count of conspiracy to violate the federal Anti-Kickback Statute.

Woroboff, Willard, and Mills worked for a telemedicine company and used their high-level positions to produce large volumes of prescriptions for compounded medications and durable medical equipment (DME), according to the indictment.

Starting in May 2014, the individuals began generating the faulty prescriptions without proper communication between the patient and a provider. Healthcare providers involved with the telemedicine company agreed to write the prescriptions, which violated certain state telemedicine laws, in exchange for kickback payments.

Thu was one of the involved physicians and received $35 from Woroboff, Willard, and Mills for each prescription that he wrote.

The defendants convinced Thu and other healthcare provides to write prescriptions without talking to patients first by falsely assuring them that other nurses had already talked to the patients about their medical histories and determined that the prescription was medically necessary.

However, the so-called nurses were in the Philippines and not registered to practice in the United States. In most cases, they had not spoken with patients either.

The telemedicine company received patient information from marketing company representatives instead. These representatives also paid the telemedicine company to produce the fraudulent prescriptions for compounded medications and DME, according to the evidence.

Additionally, Woroboff and Willard used fake phone numbers and addresses for the healthcare providers in order to hide their fraudulent activity.

The telemedicine fraud scheme led private health insurance companies, TRICARE, and Medicare to face losses of around $37 million.

If convicted, the defendants could face up to 10 years in prison for conspiracy to commit healthcare fraud and up to five years in prison for conspiracy to violate the federal Anti-Kickback Statute. In addition, the defendants could potentially face fines of up to $250,000 for each count or twice the gross profit or loss caused by the offense.

The U.S. Attorney’s Office, the Office of the Inspector General, and the U.S. Department of Labor-Employee Benefits Security Administration assisted in the investigation that led to the indictment.

A recent telemedicine fraud scheme centered around fraudulent prescriptions as well, with a pharmacy owner and several co-conspirators deceiving private and public payers out of $174 million.

Policymakers are attempting to quell telemedicine fraud with the introduction of new legislation and requirements.

The Telehealth Extension Act, recently introduced in the House by members of the House Ways and Means Health Subcommittee, aims to address telemedicine Medicare fraud by requiring in-person appointments within six months before administering DME or clinical laboratory tests. The provisions would also allow the Centers for Medicare and Medicaid Services to monitor and identify providers who are ordering and billing Medicare for these services in high volumes.