Detroit Medical News, Third Quarter 2022 edition

It is no surprise that the use of telemedicine as a means of providing patients with access to medical care has increased significantly in recent years. Likewise, the number of telemedicine companies offering a broad range of health care items and services through physician and nonphysician practitioners has also increased significantly. On July 20, 2022, the United States Department of Health and Human Services Office of Inspector General (“OIG”) issued a Special Fraud Alert (“Alert”) warning physicians and other practitioners to exercise caution when entering into arrangements with telemedicine companies.

The Alert is in response to dozens of OIG investigations of fraud schemes involving telemedicine and other companies that purported to provide telemedicine, telehealth, or telemarketing services. Although the fraud schemes vary in design and operation and involve a wide range of different individuals and types of entities, the Alert explains that one common element of the schemes is the way the telemedicine companies have used kickbacks to reward physicians and nonphysicians (collectively, “Practitioners”) to further the fraud schemes. Specifically, the telemedicine companies will generally arrange with Practitioners to order or prescribe medically unnecessary items and services for individuals who are solicited and recruited by telemedicine companies. Often, the Practitioners are paid to order or prescribe items or services (1) to patients with whom the Practitioners have limited, if any, interaction, and (2) without regard to medical necessity.

To assist Practitioners, the Alert identifies a list of seven “suspect characteristics” related to Practitioner arrangements with telemedicine companies which could suggest an arrangement that presents a heightened risk of fraud and abuse, as follows:

1. The purported patients for whom the Practitioner orders or prescribes items or services were identified or recruited by the telemedicine company, telemarketing company, sales agent, recruiter, call center, health fair, and/or through internet, television, or social media advertising for free or low out-of-pocket cost items or services.

2. The Practitioner does not have sufficient contact with or information from the purported patient to meaningfully assess the medical necessity of the items or services ordered or prescribed. The Alert provides as an example a telemedicine company that requires the Practitioner to use audio-only technology to facilitate an engagement with purported patients, regardless of their preference, and does not provide the Practitioner with other telehealth modalities. The Practitioner may also receive from the telemedicine company purported “medical records” that reflect only cursory patient demographic information or a medical history that appears to be a template but does not provide sufficient clinical information to inform the Practitioner’s medical decision-making.

3. The telemedicine company compensates the Practitioner based on the volume of items or services ordered or prescribed, which may be characterized to the Practitioner as compensation based on the number of purported medical records that the Practitioner reviewed.

4. The telemedicine company only furnishes items and services to Federal health care program beneficiaries and does not accept insurance from any other payor.

5. The telemedicine company claims to only furnish items and services to individuals who are not Federal health care program beneficiaries but may in fact bill Federal health care programs.

6. The telemedicine company only furnishes one product or a single class of products (e.g., durable medical equipment, genetic testing, diabetic supplies, or various prescription creams), potentially restricting a Practitioner's treating options to a predetermined course of treatment.

7. The telemedicine company does not expect Practitioners (or another Practitioner) to follow up with purported patients nor does it provide Practitioners with the information required to follow up with purported patients (e.g., the telemedicine company does not require Practitioners to discuss genetic testing results with each purported patient).

The Alert clarifies that the above list is not exhaustive, and the presence or absence of any one of the suspect characteristics is not determinative of whether an arrangement would be grounds for legal sanctions, such as criminal, civil, or administrative liability (including possible disciplinary action against the Practitioner’s health professional license or registration). The Alert encourages Practitioners to use heightened scrutiny and exercise caution before entering into an arrangement with a telemedicine company.

For this purpose, physicians who are considering entering into an arrangement with a telemedicine company should consult with legal counsel to review any written agreement with the telemedicine company and to ensure that the arrangement is legitimate and enables the physician to comply with applicable state and federal laws. For example, Michigan law prohibits a physician or other health professional from providing a telehealth service without directly or indirectly obtaining consent for treatment. Proof of such consent must be maintained in the patient’s up-to-date medical record that is retained in accordance with the Public Health Code’s medical record retention requirements. In addition, Physicians should ensure that they provide telemedicine services only to patients who are located in states in which the physician is licensed or authorized to provide telemedicine services.

*This article first appeared in the Detroit Medical News, Third Quarter 2022 edition.