Contributors: Michael J. Rinaldi and Kevin Moran
To learn more about Michael and Kevin, click here.
The COVID-19 pandemic has caused a record increase in demand for expanded access to remote medical care. Backed by the new regulatory flexibilities of federal and state governments, providers have met that patient demand through a rapid increase in the use of telemedicine. By all accounts, it looks like telemedicine—and its amplified use—are here to stay. But such increased use, no matter how well-intentioned from a public health perspective, could expose providers to increased scrutiny and enforcement actions.
COVID-19 results in providers closing the door and picking up the phone.
According to the Centers for Medicare & Medicaid Services (CMS), telehealth, telemedicine, and related terms generally refer to the exchange of medical information from one site to another through electronic communication to improve a patient’s health.1 For reimbursement purposes, Medicare distinguishes between “telehealth visits,” “virtual check-ins,” and “E-visits,” and each must satisfy certain requirements to be reimbursable.
Although many patients likely had their first telemedicine experience over this past year, telemedicine is not new. Historically, telemedicine focused on serving remote and rural areas that lacked adequate access to care. But, for obvious reasons, the COVID-19 pandemic set in motion a dramatic increase in the use of telemedicine.
This spike in telemedicine is likely attributable to the federal emergency declarations. CMS issued emergency declarations and used its waiver authority under Section 1135 of the Social Security Act to lift geographic and site-of-service restrictions to allow telehealth services to be delivered wherever a beneficiary is located, including his home or a temporary healthcare site. CMS then utilized emergency rulemaking to add 135 services to the Medicare telehealth services list. It also expanded the types of practitioners who can provide telehealth services.2 Further, the U.S. Department of Health and Human Services (HHS), Office for Civil Rights (OCR), exercised its enforcement discretion in deciding to refrain from imposing Health Insurance Portability and Accountability Act (HIPAA) penalties on covered healthcare providers for HIPAA violations in connection with the good faith delivery of telemedicine using non-public facing technologies.3
An internal CMS analysis found that before COVID-19 only 14,000 beneficiaries received a telehealth service per week. Perhaps not surprisingly, during the first few months of the COVID-19 crisis (from mid-March through early-July 2020), over 10.1 million beneficiaries received a telehealth service.4
Providers and patients see safety and convenience. Enforcers see illegal kickbacks, phantom visits, and bribes.
Just as these new regulatory flexibilities spurred the spike in telemedicine use, they also opened the door as a potential hotbed for fraud and abuse. And, more recently, regulatory agencies have identified telemedicine as an enforcement priority.
As with telemedicine itself, enforcement in this area predates the pandemic. But, with the increase in the use of telemedicine, enforcement has increased—a trend that can be expected to continue.
For instance, in September 2020, the Department of Justice (DOJ) announced its “largest healthcare fraud enforcement action in [DOJ] history.” Described as a “national healthcare fraud takedown,” the DOJ charged 345 individuals, including over 100 doctors, nurses, and other professionals, for allegedly submitting over $6 billion in false and fraudulent claims to public and private insurers, including over $4.5 billion connected to telemedicine. Operators of telemedicine companies allegedly paid doctors and nurse practitioners to order unnecessary durable medical equipment (DME), genetic and other diagnostic testing, and pain medications, either without any patient interaction or with only a brief telephonic conversation with patients they had never met nor seen. DME companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted false and fraudulent claims to Medicare and other government insurers. The CMS Center for Program Integrity separately announced that it took a “record-breaking number” of administrative actions related to telemedicine fraud, including revoking the Medicare billing privileges of 256 additional medical professionals for their involvement in telemedicine schemes.5
Prosecutors are also proceeding against individual, standalone defendants, sending a message that fraudulent conduct that exploits the circumstances created by the pandemic is a high priority for enforcers. For instance, in May 2020, the U.S. Attorney’s Office for the Middle District of Florida charged Ashley Hoobler Parris, the owner and operator of marketing companies for genetic testing services, with conspiring to commit healthcare fraud related to COVID-19 testing. Parris allegedly solicited and received illegal kickback payments from telemedicine companies in exchange for providing Medicare beneficiary information and swabs to laboratory owners and operators, who in turn would submit COVID-19 claims for reimbursement. Parris and her co-conspirators would obtain doctors’ orders for testing for those beneficiaries by paying illegal kickbacks to co-conspirators at telemedicine companies.6
In announcing the charges against Parris, DOJ officials emphasized their commitment to prosecuting COVID-19 related healthcare fraud, stating: “The department will continue to work with our law enforcement partners to protect the public from those who defraud our government healthcare programs, especially those who exploit the COVID-19 pandemic for personal gain.... Fraud related to COVID-19 is particularly disturbing, as it exploits a national crisis for personal gain....”
As noted above, enforcement in this area predates the pandemic, with the DOJ’s “Telemedicine Fraud Initiative” having been established in 2019. But prosecutors have been particularly focused on weeding out fraudulent conduct that took advantage of circumstances created by the pandemic. To that end, the DOJ created its “COVID-19 Fraud Initiative,” which includes a working group of federal law enforcement and public health agencies tasked with identifying and combatting frauds connected to the pandemic, including healthcare fraud.
On the compliance side, in January 2021, the HHS’s Office of the Inspector General (HHS-OIG) added two new audits to its Work Plan: “Audits of Medicare Part B Telehealth Services During the COVID-19 Public Health Emergency," 7 and “Audits of Home Health Services Provided as Telehealth During the COVID-19 Public Health Emergency.” 8
The Part B audit is for the purpose of examining whether Medicare requirements were met for the expanded classes of providers eligible to bill Medicare for telemedicine services (e.g., focusing on whether services rendered met Medicare requirements, and an evaluation of “services related to distant and originating site locations, virtual check-in services, electronic visits, remote patient monitoring, use of telehealth technology, and annual wellness visits.”). The home health audit will scrutinize “which types of skilled services were furnished via telehealth and whether those were administered and billed in accordance with Medicare requirements.”
Given these HHS-OIG audits specifically address telemedicine and home health care, providers can expect increased enforcement action and, in more egregious cases, referrals to criminal prosecutors.
Telemedicine as the new normal; providers should navigate this brave new world with caution.
Even in light of all its benefits and convenience, telemedicine carries with it a widespread potential for abuse, and thereby an ever-growing scrutiny by regulators and prosecutors, at least at the federal level. The investigations and actions announced by DOJ and other federal agencies so far only provide a first look at what’s to come in this arena of telemedicine compliance. Providers can expect more investigations—including scrutiny surrounding telemedicine reimbursement rules specifically. And enforcement actions are likely to continue to involve anti-kickback and medical necessity theories. But, as telemedicine continues to gain traction, prosecutors and regulators are likely to advance more theories: violations of HIPAA, fee-splitting laws, data privacy laws, licensure laws, and practice of medicine laws, among other likely candidates. At the federal level, it’s also likely prosecutions of individuals, not just entities, for healthcare fraud will see an uptick.
Perhaps more so than any other profession, providers now face the task of navigating an exceedingly complex regulatory environment. Given that telemedicine is likely a permanent fixture of our healthcare system, providers and other professionals should proceed with caution and monitor the enforcement actions and regulatory developments that will assuredly ensue. Among other things, providers should be attuned to circumstances in which shorter telemedicine appointments could be perceived as a way to maximize billing or instances in which there is an abnormally high number of new telemedicine patients, such that there is a concern about whether a genuine patient relationship exists. We expect enforcers to look closely at such circumstances.
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Disclaimer: This article has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice.
- CMS, “Medicare Telemedicine Health Care Provider Fact Sheet” Mar. 17, 2020, https://www.cms.gov/newsroom/fact-sheets/medicare-telemedicine-health-care-provider-fact-sheet.
- In April 2021, these waivers and new rules were extended and expanded. CMS, "COVID-19 Emergency Declaration Blanket Waivers for Health Care Providers," Apr. 8, 2021, https://www.cms.gov/files/document/summary-covid-19-emergency-declaration-waivers.pdf.
- HHS, "OCR Announces Notification of Enforcement Discretion for Telehealth Remote Communications During the COVID-19 Nationwide Public Health Emergency," Mar. 17, 2020, https://www.hhs.gov/about/news/2020/03/17/ocr-announces-notification-of-enforcement-discretion-for-telehealth-remote-communications-during-the-covid-19.html.
- HHS, "HHS Issues New Report Highlighting Dramatic Trends in Medicare Beneficiary Telehealth Utilization amid COVID-19," July 28, 2020, https://www.hhs.gov/about/news/2020/07/28/hhs-issues-new-report-highlighting-dramatic-trends-in-medicare-beneficiary-telehealth-utilization-amid-covid-19.html.
- Dep’t of Justice, Press Release: "National Health Care Fraud and Opioid Takedown Results in Charges Against 345 Defendants Responsible for More than $6 Billion in Alleged Fraud Losses," Sept. 30, 2020, https://www.justice.gov/opa/pr/national-health-care-fraud-and-opioid-takedown-results-charges-against-345-defendants. Fifty-five telemedicine cases were brought as a result of the takedown, and most are awaiting resolution. More recently, however, the DOJ announced five guilty pleas in a nationwide telemedicine pharmacy fraud conspiracy as a result of the takedown. There, the primary conspirator pled guilty, faces up to 10 years in prison, and is awaiting sentencing. He also agreed to pay $24,919,254 in restitution and forfeit over $3 million. Department of Justice, Press Release: "Five New Guilty Pleas in Nationwide Telemedicine Pharmacy Health Care Fraud Conspiracy," Jan. 25, 2021, https://www.justice.gov/usao-edtn/pr/five-new-guilty-pleas-nationwide-telemedicine-pharmacy-health-care-fraud-conspiracy.
- Department of Justice, Press Release: "Georgia Woman Arrested For Role In Scheme To Defraud Health Care Benefit Programs Related To Cancer Genetic Testing And COVID-19 Testing," May 15, 2020, https://www.justice.gov/usao-mdfl/pr/georgia-woman-arrested-role-scheme-defraud-health-care-benefit-programs-related-cancer. Parris pled guilty to conspiracy to commit healthcare fraud in November 2020, faces a maximum of 10 years in prison, and is awaiting sentencing.
- HHS-OIG: "Audits of Medicare Part B Telehealth Services During the COVID-19 Public Health Emergency," Jan. 2021, https://www.oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000556.asp.
- HHS-OIG: "Audit of Home Health Services Provided as Telehealth During the COVID-19 Public Health Emergency," Feb. 2021, https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000553.asp.