DOJ Files Charges Linked to Abuse of COVID-19 Telehealth Freedoms

(Updated on May 28 with further comments) Justice Department officials have announced the first criminal charges linked to telehealth coverage laws that have been relaxed during the coronavirus pandemic.

In a press release issued on Wednesday, the DOJ announced charges against 14 defendants for their alleged participation in several fraud schemes that exploited COVID-19 guidelines and resulted in more than $143 billion in false billings.

Some of those fraud schemes referenced telehealth.

“In another type of COVID-19 health care fraud scheme announced today, defendants are alleged to have exploited policies that were put in place by CMS to enable increased access to care during the COVID-19 pandemic,” the press release noted. “For example, pursuant to the COVID-19 emergency declaration, telehealth regulations and rules were broadened so that Medicare beneficiaries could receive a wider range of services from their doctors without having to travel to a medical facility. The cases announced today include first in the nation charges for allegedly exploiting these expanded policies by submitting false and fraudulent claims to Medicare for sham telemedicine encounters that did not occur. As part of these cases, medical professionals are alleged to have offered and paid bribes in exchange for the medical professionals’ referral of medically unnecessary testing.”

The charges try to link fraud cases to telehealth coverage, but are more closely aligned with telefraud – or, as telehealth advocates have long argued, “investigations of traditional fraud masquerading as telehealth.”

With Congress pressured to create a long-term telehealth policy that extends some COVID-19 measures beyond the public health emergency, opponents have argued that these relaxed rules have opened the doors to fraud and abuse.

Supporters, meanwhile, say investigations like those conducted by the DOJ aren’t really about telehealth services.

The debate prompted a letter in March from the Health and Human Services Department’s Office of the Inspector General, which has launched several audits related to pandemic-based telehealth services.

“We are aware of concerns raised regarding enforcement actions related to ‘telefraud’ schemes, and it is important to distinguish those schemes from telehealth fraud,” HHS-OIG Principal Deputy Inspector General Christi Grimm wrote. “In the last few years, OIG has conducted several large investigations of fraud schemes that inappropriately leveraged the reach of telemarketing schemes in combination with unscrupulous doctors conducting sham remote visits to increase the size and scale of the perpetrator's criminal operations. In many cases, the criminals did not bill for the sham telehealth visit. Instead, the perpetrators billed fraudulently for other items or services, like durable medical equipment or genetic tests.”

The OIG audits and the DOJ investigations point to the fact that fraud and abuse are increasing during the pandemic, due in part to relaxed regulations that leave the door open to improper uses. This, in turn, prompts increased scrutiny from the federal government.

But it’s also allowing some to unfairly link telehealth to fraud cases and give the industry a black eye. And some within the industry are concerned about that characterization.

“These schemes focused on durable medical equipment (DME), compounding pharmacy, opioids, diagnostic tests and other areas – rather than false claims related to virtual treatment of a patient,” Krista Drobac, executive director of the Alliance for Connected Care, said in a February 9 letter to Grimm. “These schemes also took place before the Medicare restrictions on telehealth were lifted, and to the extent these criminals used real telehealth tools, the telehealth was the means to the end, not the source of the fraud itself.”

“(P)revious OIG and DOI investigations that are identified as ‘telehealth’ were not actually related to telehealth,” she wrote. “They were investigations of traditional fraud masquerading as telehealth.”

Drobac sent out another letter this week in response to the latest DOJ news.

"No federal regulator or oversight body has yet issued a comprehensive study of telehealth claims during the pandemic, yet the agencies continue to send out charged statements with misleading headlines," she wrote. "The reality is that the majority of instances of fraud highlighted by DOJ today in its '2021 National COVID-19 Health Care Fraud Takedown' have nothing to do with telehealth. The one case of alleged fraud billed as telehealth-related by the DOJ represents behavior that just as easily occurs in in-person settings. The HHS OIG has previously clarified that tele-fraud does not constitute telehealth fraud, and that their work to examine telehealth continues."

"The Alliance for Connected Care continues to support efforts to root out health care fraud across all modalities, including telehealth and virtual care," she added. "To date, neither DOJ nor HHS OIG nor any other oversi ght body has identified a pattern of fraudulent behavior unique to telehealth as a modality of care. We urge policymakers to read the fine print on these cases and develop interventions that are an appropriate level of response to the fraud challenges identified."