Telemedicine Fraud - $6 Billion and Counting
As telemedicine becomes an integral part of health care delivery, it is prone to increasing risk for fraud opportunities
Telemedicine fraud is a huge challenge given the ease with which fraudulent claims can blend in with legitimate ones.
Summary
Healthcare insurance fraud is estimated to be between $80 to $300 billion annually.
Telehealth has been limited in the past over concerns of fraudulent practices.
Expansion of telemedicine for the COVID-19 pandemic has opened the door to fraud.
The most common fraudulent schemes involve kickbacks and false billing.
Background
PRE-COVID-19:
Restrictions were largely based on HIPPA and privacy concerns.
Many regulations were relaxed to avoid face-to face interactions and COVID-19 exposure.
POST-COVID-19:
Relaxed, suspended or eliminated rules, regulations and laws to allow wider use of telehealth.
Allows communication and transfer of clinical data with decreased security..
Allowable ways to bill for such services have not been well defined.
CENTER FOR MEDICARE AND MEDICAID SERVICES (CMS)
Pre COVID-19: 101 telehealth services allowed
March 2020: 85 new services added
April 2020: 51 additional services added
Telehealth services increased from 101 to 241 over one month
Review
Recent Examples:
86 individual’s charged with submitting $4.5 billion in false and fraudulent claims.
256 medical professionals had Medicare billing privileges revoke related to telemedicine fraud.
24 individuals from U.S., Philippines and Latin America charges with $1.2 Billion Medicare scheme
Owners of 2 telemedicine companies charged with defrauding Medicare of $56 million with bribery and kickbacks involving orthotic braces.
Licensed clinical social worker hired to provide consultative mental health services via a telehealth model pleaded guilty to conspiracy to defraud Medicare.
The most common telehealth fraudulent schemes are kickbacks and billing schemes (Table 1).
There are 2 main types of COVID-19 fraud conspiracies (Table 2)
How the Scheme Works:
STEP 1: Call center markets to Medicare or Medicaid beneficiaries and transfers patient to telemedicine company for medical consultation
STEP 2: Telemedicine company pays practitioner to order unnecessary prescription, labs or medical equipment with limited or without patient interaction.
STEP 3: Pharmacy, lab medical equipment company:
Purchases prescription for telehealth company
Sends product to patient
Bills CMS
Telemedicine company executives receive kickback
Conclusions
Telemedicine fraud is a formidable challenge given the changing rules and how fraudulent claims can be easily blended with legitimate claims.
As telemedicine becomes an integral part of health care delivery, it will be prone to increase risk for fraud opportunities.
Contact me to learn more about optimizing your Telehealth Strategy