Whistleblowers Expose Rampant Telemedicine Fraud

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Whistleblowers Expose Rampant Telemedicine Fraud

Recently, a man living in a nursing home in Pennsylvania was offered a free orthotic brace over the phone. Although the man’s son declined the offer and refused to give out his father’s Medicare information, 13 braces were later delivered to the man’s home.

Eventually, Medicare would pay over $4,000 for the braces. Four doctors had prescribed them for practically every part of the older man’s body. Although no doctor had seen or even talked to the patient, medical device manufacturers portrayed the phone call as a telemedicine consultation.

According to an advocate for elders’ rights who was involved in the case, “oftentimes, there is no contact between the doctor and the patient before they get the braces. And in almost all of the cases, the person prescribing the braces is somebody the Medicare beneficiaries don’t know.”

A survey by Deloitte revealed that about 25 percent of American consumers had at least one telehealth visit with a doctor during 2018. According to the most recent data available, Medicare beneficiaries have nearly 300,000 telehealth consultations per year. An analysis by regulators found that at least one-third of the telehealth interactions reimbursed by Medicare violate some of the program’s requirements, thus constituting False Claims Act violations.

In 2019, the government investigated at least five large-scale schemes involving telemedicine. One was a $1.2 billion scheme described by prosecutors as “one of the largest Medicare fraud schemes in U.S. history.” Twenty-four people were indicted in the case, which involved sham telemedicine consultations and prescriptions for medically unnecessary braces.  

In a typical telehealth fraud scheme, durable medical equipment companies paid the sham telemedicine companies for brace prescriptions. The telemedicine providers, in their turn, paid illegal kickbacks to the prescribing doctors. Medicare eventually reimbursed the braces. Participants in the scheme made millions of dollars, which were used to purchase luxury homes and yachts, or hidden using shell companies.

Kaiser Health News found that between 2013 and 2017, Medicare spending on braces for knees, ankles, wrists, elbows, shoulders, and back increased by at least $200 million. This spectacular increase was simultaneous with the advent of many dubious telemedicine providers, who are actually no more than online marketing companies with no healthcare experience.

Despite the recent DOJ crackdown, whistleblowers are continually coming forward to report telemedicine fraud involving DME providers. In fact, the families of Medicare beneficiaries have reported receiving numerous calls from people posing as Medicare representatives and offering free DME even after their relatives passed away.

Telehealth fraud does not only affect Medicare; TRICARE, and state Medicaid programs have also been defrauded by corrupt telemedicine companies and physicians. Besides DME scams, there are many other types of fraud, including overbilling, upcoding, and billing for ineligible services.

As telehealth budgets grow exponentially, so do opportunities to defraud the government. The Department of Veterans Affairs alone plans to spend more than a billion dollars on telemedicine services in 2020. 

Under the False Claims Act, whistleblowers who file a fraud lawsuit can receive between 10 and 30 percent of any recoveries resulting from their complaint. During Fiscal Year 2019, the DOJ recovered over $3 billion from healthcare fraud cases. If you have first-hand information about telehealth fraud, a whistleblower attorney can help you file a lawsuit and secure a substantial award. 

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David Kani

David Kani is a Southern California based trial lawyer with a focus on class actions and whistleblower (False Claims Act, SEC and others) cases.

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