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Telemedicine fraud: How whistleblowers can report it and get rewarded

Telemedicine fraud has long been a concern, but whistleblowers are needed now more than ever during the coronavirus crisis as the opportunities for Medicare fraud in telehealth cases have greatly expanded along with telemedicine use.

The huge jump in telehealth claims – as more patients choose to stay home because of covid-19 concerns – makes it extremely hard for Medicare to differentiate fraudulent claims from those submitted for legitimate telehealth services.

That’s why whistleblowers can play an important role to stop significant telemedicine fraud that can drain millions from Medicare.

Telemedicine is an important way for those who are unable to go to a doctor’s office to consult with their healthcare providers or for patients who have concerns about possible exposure to the coronavirus. But some fraudsters exploit the need for telehealth for their own fraudulent financial gains.

Oftentimes, telemarketing companies work with sham telemedicine companies that find doctors willing to be paid to write medically unnecessary prescriptions or orders for Medicare beneficiaries without speaking to them or evaluating their condition.

Whistleblowers can report telemedicine fraud and receive rewards under the False Claims Act 

Whistleblowers who know of telehealth fraud can report the fraudulent healthcare claims and work with the government to stop the fraud by filing a “qui tam” case under the False Claims Act.

The False Claims Act empowers private citizens to sue entities and individuals who are defrauding the government and recover the stolen funds on the government’s behalf. In most successful qui tam cases, whistleblowers and their attorneys join with the government to pursue the lawsuit.

The law offers whistleblowers protection from employer retaliation as well as rewards. Whistleblowers who file qui tam lawsuits are entitled to 15 percent to 30 percent of the amount the government recovers as a result of their cases.

Before deciding whether to file a qui tam lawsuit, whistleblowers should consult with an experienced whistleblower attorney to consider the risks and rewards of pursuing a case and to determine how best to proceed. (The False Claims Act requires that whistleblowers use attorneys to file qui tam cases.)

 [For a free, confidential consultation with the whistleblower attorneys of Phillips & Cohen, contact us.]    

Examples of fraud schemes involving telemedicine

Fraudsters often target elderly, disabled and other vulnerable patients in fraudulent telehealth schemes, capitalizing on their fears and social isolation.

There are many ways that false claims for Medicare payments can occur with telehealth. Some telemedicine fraud schemes involve:

  • Kickbacks paid to doctors or others to get referrals for healthcare services or treatment in violation of the Anti-Kickback Statute.
  • False billing or coding for medical treatment and services.
  • Unnecessary or excessive prescriptions, especially opioid prescriptions.
  • Unnecessary or non-existent screening tests for cancer and other conditions. Oftentimes, the test results aren’t even sent to patients.
  • Billing Medicare for durable medical equipment sent to Medicare beneficiaries who don’t need the equipment or didn’t request it.

Telemedicine fraud – enforcement actions

The federal government has stopped many fraudulent telehealth schemes, including two that each cost Medicare billions of dollars and are among the largest Medicare fraud cases ever prosecuted.

In one telemedicine scheme, telemedicine companies allegedly duped Medicare beneficiaries into signing up for unnecessary or nonexistent cancer-screening, genetic tests that were very expensive.

The doctors involved usually did not examine or speak with the Medicare beneficiaries for whom they ordered test. Some tests were repeated many times. Beneficiaries often did not even receive their test results or, if they did, the tests were worthless to their actual doctors.

In a separate case, more than five telemedicine companies, 130 durable medical equipment (DME) companies and three licensed medical professionals took part in an alleged telehealth scheme involving the sale of back, shoulder, wrist and knee braces.

The scheme lured in hundreds of thousands of Medicare beneficiaries. Dozens of people, ranging from corporate executives to healthcare professionals, were charged in the case last year. At least one doctor has pleaded guilty.

The owner of several telemarketing companies paid $2.5 million last year to settle charges that his companies fraudulently obtained information about private insurance and Medicare coverage from consumers across the country.

He used that personal information to arrange for the consumers to receive prescription pain creams they didn’t need or request as well as other similar products. He allegedly sold those prescriptions to pharmacies based on the value and volume of the prescriptions under the guise of marketing services.

[Contact Phillips & Cohen to discuss how to report specific instances of healthcare fraud and possible rewards under the False Claims Act.]

The Covid-19 Telehealth Program

As part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, Congress provided $200 million for the Covid-19 Telehealth Program.

The program is limited to nonprofit and public-eligible healthcare providers that meet certain criteria. Healthcare providers must submit invoices and supporting documentation to receive reimbursement for eligible expenses and services.

The covid-19 telehealth funds can be used to fund integrated telemedicine systems, networking equipment, laptops to use for treatment of patients via video or telephones and other telemedicine and teleconferencing needs for the evaluation, diagnosis and treatment of patients as well as patient education during the coronavirus pandemic.

To be eligible for funding, the services and devices must be purchased on or after March 13, 2020. Personnel costs are not eligible for reimbursement through the covid-19 program.

Telemedicine fraud during the covid-19 pandemic

The Centers for Medicare & Medicaid Services (CMS) has relaxed some rules around telemedicine to make it easier for patients to access care. While that helps many patients and healthcare providers, the rule changes make it easier for bad actors to defraud Medicare.

CMS has added many more billing codes for telemedicine, so that patients can consult with doctors remotely for a range of medical problems, such as flu symptoms or a muscle ache.

CMS also has eased licensing requirements for doctors who practice across state lines and restrictions on opioid prescriptions via telehealth, which raises concerns of excessive opioid prescriptions being offered.

In addition, providers who use telemedicine are allowed to waive patient deductibles and copayments during the coronavirus pandemics. Generally, the waiver of patient deductibles and copayments are considered to be kickbacks as patients are less likely to complain about charges or unnecessarily use medical services if they have to pay a share of the bill.

All of these changes make it even more vital that whistleblowers step forward when they know of telemedicine fraud.

Have questions about telemedicine fraud? Need assistance?

If you know of instances of telemedicine fraud and would like to consider your options for moving forward, contact the whistleblower attorneys at Phillips & Cohen.



Phillips & Cohen is the nation’s most successful law firm representing whistleblowers, with more than $12.3 billion recovered as a result of its cases. The firm’s whistleblower attorneys have won more than $1 billion in rewards for its clients. Phillips & Cohen represents whistleblowers in qui tam lawsuits (False Claims Act cases) as well as cases brought under the whistleblower programs of the SEC, the Commodity Futures Trading Commission and the Internal Revenue Servicewww.phillipsandcohen.com



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