2020 Health Care Fraud Takedown Focuses the Spotlight on Telehealth

Wilson Sonsini Goodrich & Rosati
Contact

Wilson Sonsini Goodrich & Rosati

Recently, the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced the completion of the 2020 National Health Care Fraud Takedown, involving 345 defendants in 51 judicial districts charged with participating in healthcare fraud schemes that resulted in more than $6 billion in alleged losses to federal healthcare programs, including enforcement actions taken against telemedicine executives, owners of durable medical equipment (DME) companies, genetic testing laboratories, pharmacies, and more than 100 medical practitioners. The government also revoked federal healthcare billing privileges for 256 medical professionals. The schemes allegedly involved luring patients through various marketing tactics, such as telemarketing calls, direct mail, television advertisements, and internet pop-up advertisements, and illegal kickbacks made by telemedicine executives to medical practitioners to order unnecessary durable medical equipment, genetic and other diagnostic testing, and medications, with little or no patient interaction. The durable medical equipment, test results, or medications were often not provided to patients or were worthless. Many patients were misled, misdiagnosed, or delayed in obtaining the appropriate treatment. This takedown reflects the government's continued scrutiny of telehealth services arrangements.

Investors, companies that contract with telehealth service providers, medical practitioners, laboratories, pharmacies, and medical products suppliers and manufacturers should review their services arrangements carefully to avoid the referral and kickback risks characteristic of the schemes that OIG focused on in its recent takedown and enforcement actions, including the following aspects of telehealth services:

  • Marketing strategies;
  • Provider-patient relationships;
  • State licensure and telemedicine requirements;
  • Kickbacks and referrals with other parties, including medical practitioners, laboratories, pharmacies, and suppliers and manufacturers of medical products;
  • Coding and billing practices; and
  • Fee arrangements among the parties.

With increased utilization of telehealth services as a result of the COVID-19 pandemic, enforcement action in this space is expected to increase significantly in the coming years.1


[1] Recent examples of enforcement actions taken against telemedicine companies include: DOJ Press Release (February 5, 2020), “Two Owners of Telemedicine Companies Charged for Roles in $56 Million Conspiracy to Defraud Medicare and Receive Illegal Kickbacks in Exchange for Orders of Orthotic Braces”; DOJ Press Release (April 23, 2020), “Telemedicine company owner charged in $60 million fraud scheme”; DOJ Press Release (May 13, 2020), “Durable medical equipment company owner charged in kickback scheme”; and DOJ Press Release (June 11, 2020), “Florida man charged in telemedicine scheme.”

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Wilson Sonsini Goodrich & Rosati | Attorney Advertising

Written by:

Wilson Sonsini Goodrich & Rosati
Contact
more
less

Wilson Sonsini Goodrich & Rosati on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.