Telemedicine – Medicare’s Newest Fraud Frontier

Medicare and Medicaid have been responsive to the coronavirus pandemic in many ways. Because patients are safer weathering out the storm at home, the federal government and many states have relaxed rules on telehealth. That means instead of waiting to weeks or months to see your physician for non emergency healthcare needs, you can simply “visit” with your provider by phone or video chat.

Telemedicine – Medicare’s Newest Fraud Frontier

Telemedicine protects healthcare workers too. Having a waiting room full of sick people is dangerous for all.

States have responded to the pandemic by loosening the restrictions on telemedicine. Some states are even allowing doctors licensed in one state to respond to the healthcare needs of patients in another. Medicare and many private insurance companies have relaxed their rules to permit doctors to bill for these virtual visits as if they were in the same room as the patient.

Using technology also helps patients in rural areas who might have to travel long distances to see a specialist.

Top 8 Benefits of Telemedicine

  1. Safer for patients and healthcare workers (slows the spread of infectious diseases)
  2. Permits more frequent monitoring of patients
  3. Allows better access to specialists
  4. Increases level of care in rural communities
  5. Expands access to patients who can’t drive or travel
  6. Less time consuming for patients
  7. Increases patient satisfaction (based on CVS study)
  8. Reduces overhead for physicians

In 2013, just 350,000 Americans used telemedicine. In 2018, the number increased to 7 million. This year, the number is estimated to be in the tens of millions of patients. Some predict the number of virtual visits could reach 1 billion!

Many hospitals and physicians are now using telemedicine. Doctors hope to reduce the number of sick patients in their waiting areas. Hospitals are now turning to telehealth to keep patients worried that they may have coronavirus from clogging emergency rooms. Unfortunately, newly loosened rules spurred by the coronavirus pandemic have also attracted fraudsters.

Today millions of Americans are turning to telemedicine. (We use telemedicine, telehealth, tele-a-doc interchangeably however our favorite term for video chat visits remains “doc in a box”!) Many patients are using the technology for the first time. Hospitals, physicians and insurance companies love it because it is the best way to maintain social distancing.

Doctors, hospitals, the government and even private insurance companies are urging patients with nonlife threatening conditions to stay away from hospitals. For many, that means telehealth.

Medicare, which is regulated by the federal government, now says that doctors don’t have to be licensed in the same state as the patient if using telemedicine. Many states are following the federal government’s lead.

The new Medicare rules say:

Medicare has temporarily expanded its coverage of telehealth services to respond to the current Public Health Emergency. During this time, you will be able to receive a specific set of services through telehealth including evaluation and management visits (common office visits), mental health counseling and preventive health screenings without a copayment if you have Original Medicare. This will help ensure you are able to visit with your doctor from your home, without having to go to a doctor’s office or hospital, which puts you and others at risk of exposure to COVID-19.

  • You may be able to communicate with your doctors or certain other practitioners without necessarily going to the doctor’s office in person for a full visit. Medicare pays for “virtual check-ins”—brief, virtual services with your physician or certain practitioners where the communication isn't related to a medical visit within the previous 7 days and doesn’t lead to a medical visit within the next 24 hours (or soonest appointment available).
  • You need to consent verbally to using virtual check-ins and your doctor must document that consent in your medical record before you use this service. You pay your usual Medicare coinsurance and deductible for these services.
  • Medicare also pays for you to communicate with your doctors using online patient portals without going to the doctor’s office. Like the virtual check-ins, you must initiate these individual communications.
  • If you live in a rural area, you may use communication technology to have full visits with your doctors. The law requires that these visits take place at specified sites of service known as telehealth originating sites, and get services using a real-time audio and video communication system at the site to communicate with a remotely located doctor or certain other types of practitioners. Medicare pays for many medical visits through this telehealth benefit.

Telemedicine Will Lead to More Medicaid Fraud

There is a dark side to telemedicine. Despite all the benefits, states are worried that the relaxed rules will usher in a new wave of Medicaid fraud.  The Inspector General of U.S. Department of Health And Human Services is worried that the suddenly relaxed rules will usher in a new wave of Medicare fraud. He says, “There are unscrupulous providers out there, and they have much greater reach with telehealth. Just a few can do a whole lot of damage.”

Government officials are most worried about Medicaid and Medicare telehealth schemes involving telemedicine genetic testing, durable medical equipment, coronavirus “emergency kits” and expensive drugs formulated by compounding pharmacies. All of these products require a prescription by a physician.

The easing of restrictions on telemedicine means that unscrupulous con artists can call Medicaid and Medicare recipients anywhere in the country. Instead of then trying to find a doctor willing to write a prescription without seeing the patient these con artists will simply find a single doctor willing to see patients by phone and write the prescription. One bad doctor can write prescriptions for patients they have never met that are thousands of miles away.

Feds Bust $2 Billion Genetic Testing Fraud Ring

Last September federal law enforcement officers busted a fraud ring responsible for $2.1 billion dollars in losses to Medicare. 35 people were arrested from all over the United States. The common theme was providers that were offering genetic testing. And most of these scams involved corrupt telehealth doctors.

Prosecutors say the fraudsters were often not providing test results to the beneficiaries or the results were worthless.  How did they reach so many patients? The government says through the use of corrupt telehealth doctors.

The genetic testing company defendants alleged paid these telemedicine doctors to prescribe the tests, either without any patient interaction whatsoever or with a cursory telephonic “visit” with patients they had never met or seen. 

Georgia Telemedicine Company Charged in $60 Million Fraud Scheme

Recently the FBI and Georgia authorities teamed up to arrest a Georgia woman who operated two telemedicine companies, Royal Physician Network, LLC and Envision It Perfect, LLC. Prosecutors say the companies  conspired to pay medical providers, like physicians and nurse practitioners, in exchange for obtaining orders for durable medical equipment (DME).

DME scams cost taxpayers billions of dollars each year. Current law requires that you have a prescription if you need durable medical equipment and want Medicare to pay for it. That’s where states worry that relaxed telemedicine rules will allow durable medical scams to flourish. The fraudsters that run these companies can simply pay doctors and nurse practitioners to spend a few seconds online or on video chat with patients and then write the necessary prescription.

Reporting Telemedicine Fraud

Federal and 29 state whistleblower reward laws let whistleblowers with inside information about fraud involving government funds or government healthcare programs such as Medicaid, Medicare and Tricare to collect a reward for reporting the fraud. The federal False Claims Act pays rewards of between 15% and 30% of whatever the government recovers from wrongdoers. Most states pay similar amounts. Each year the government pays hundreds of millions of dollars in rewards.

The coronavirus pandemic has ushered in a new era of telemedicine. Although the pandemic will ultimately subside, telemedicine is probably here to stay. If used appropriately, telehealth makes seeing a doctor safer and easier for many patients. Unfortunately, it is also an invitation for abuse.

As noted earlier we expect most telehealth fraud will be in connection with pain creams, compounding pharmacy schemes, durable medical equipment, power wheelchairs, orthotic braces, genetic testing, and coronavirus testing. We also expect to see a few bad mental health providers engage in classic overbilling schemes. They provide their patient with 15 minutes of counseling but bill for a 60 minute session.

Medicaid fraud hurts taxpayers and patients. Society will be paying the tab for the coronavirus pandemic response for years. By reporting fraud, you not only earn a reward, you protect our healthcare system, help taxpayers and fight greed and corruption.

If you are a medical provider or have inside information about telemedicine fraud or other Medicare or Medicaid fraud and are interested in collecting a whistleblower reward, call one of our operators toll-free at 888.742.7248. You can also contact us online. All contacts are entirely confidential.

Not interested in a reward? You can report the fraud anonymously by calling 1-800-MEDICARE or any of the 50 states Medicaid Fraud Control Units.


Medicaid Fraud Hotline: 888.742.7248 or Report Online
and claim reward