In the wake of the COVID-19 pandemic, the rise of telehealth, and its subset, telemedicine, has been significant.  Medical practitioners need to pay attention to the shifting telehealth landscape on topics such as licensing, exceptions to in-person care, acceptable electronic communication technology, labeling of visits, prescription drug monitoring program queries, and record-keeping to maintain proper documentation and safeguard from potential prosecution.

In the federal regulatory space, on October 10, 2023, DEA, in concert with other federal regulators, issued a second temporary rule (88 Fed. Reg. 69879) extending COVID-19 telemedicine flexibilities for prescribing controlled substances until December 31, 2024.  Meanwhile, DEA and other federal regulators are evaluating thousands of public comments to determine implementation of a final set of telemedicine regulations under the Ryan Haight Online Pharmacy Consumer Protection Act of 2008.

At the state regulatory level, legislatures are updating telehealth laws.  In June of 2023, the Louisiana Legislature passed ACT 322 (2023 Reg. Sess. S.B. 66) which was signed into law by the Governor and will become effective on January 1, 2024.  Among other things, the new law requires relevant state agencies or professional/occupational licensing boards to promulgate rules for telehealth.

While federal regulators largely acknowledge the benefits of increased access for patients, they are wary of fraud and abuse, issuing a “Special Fraud Alert” in 2022 to medical providers entering into agreements with telehealth companies HHS-OIG Special Fraud Alert.  When deciding to embark on a telehealth investigation, federal agents will likely be looking at a practitioner’s telehealth referral pipeline, including how entities advertise and whether they only service federal health care beneficiaries, how much contact each patient has with a medical practitioner before medical necessity determinations, whether compensation is based on volume of items ordered, and if the telehealth company focuses only on providing one class of products.  In the enforcement crosshairs are diabetic supplies, durable medical equipment, genetic testing, urine screen testing, and prescription pain creams.

The latest large tele-fraud scheme charges surfaced in Massachusetts in July of 2023.  In U.S. v. David Santana, federal prosecutors charged the owner and operator of two telemedicine companies with conspiracy to commit health care fraud (18 U.S.C. § 1349) in connection with $44 million in claims to Medicare.  Prosecutors allege the scheme involved several steps.  Prosecutors allege telemarketers called and obtained information from Medicare beneficiaries.  Beneficiary information was then entered into a physician order.  The physician order was made to appear as though the practitioner had personally examined and treated the beneficiary.  Working with a medical staffing company, practitioners were sent pre-populated orders to authorize medically unnecessary durable medical equipment or genetic testing despite the lack of a qualifying telemedicine consultation.  Prosecutors also allege that Defendant paid kickbacks for beneficiary information sufficient to create and obtain signed physician orders, and received kickbacks for durable medical equipment and genetic testing orders, presumably from equipment and testing providers.

In perhaps the largest dollar tele-fraud case of 2023 ($1.9 billion), in U.S. v. Brett Blackman, et al., Miami federal prosecutors indicted three executives allegedly associated with a web of data, healthcare compliance, equipment supply, and telemarketing companies.  Prosecutors allege that defendants identified and targeted federal health care beneficiaries using advertising campaigns for free or low-cost medical equipment and prescription creams, generated physician orders and prescriptions, sold the orders to equipment suppliers, pharmacies, and telemarketing companies in exchange for kickbacks, then executed sham contracts and invoices to conceal the sale of orders.  The healthcare compliance company was allegedly an internet-based platform which prosecutors state was programmed to generate fraudulent orders for practitioners paid by telemedicine companies to sign.  The Indictment also alleges that physicians signed the orders after a brief call or no interaction with the beneficiary at all, and without regard to medical necessity.  Trial is scheduled for August 12, 2024.

Closer to home, the Gulf Coast Strike Force, composed of DOJ prosecutors and agents from HHS-OIG, FBI, IRS-CI, and the various state Medicaid Fraud Control Units in Louisiana, Mississippi, and Texas, has been actively investigating and prosecuting alleged genetic testing schemes.  In U.S. v. Jamie McNamara, federal prosecutors in New Orleans indicted the owner of laboratory companies and other businesses. The sprawling 30-page Indictment outlines an alleged $176 million scheme involving un-named co-conspirators, concealment of ownership interest, call centers with pre-approved scripts, a Florida-based telemedicine company, and kickbacks to marketers, call centers, and telemedicine companies in exchange for referring beneficiaries and physician orders for genetic testing.  Trial is scheduled for June 2024.

In U.S. v. David Thigpen, the Gulf Coast Strike Force obtained a similar telemedicine-based Indictment against a Hammond man who owned and operated urine drug and genetic testing laboratories in Louisiana and Mississippi.  The defendant has pled guilty to one count of conspiracy to commit health care fraud (18 U.S.C. § 1349) and is scheduled for sentencing on January 9, 2024.

Although many of the latest healthcare fraud cases involve old themes, namely, allegations of kickbacks, questionable medical necessity determinations, and limited or no interaction between practitioners and patients, moving forward medical practitioners need to assess and understand DEA’s anticipated final telemedicine rule(s) in conjunction with state law and licensing board rules, including the limits on electronic visit prescribing authority, and ensure that any such visits are properly documented and designated as telehealth.