Retired OIG Special Agent and Advize’s Director of Litigation & FWA Support will be stepping in each week to examine current fraud trends from the lens of an investigator. Stay tuned for weekly insights, updates, and information on healthcare’s most expensive crimes.

The topic of telemedicine and telehealth has been a very hot topic in the world of fraud, waste, and abuse.  In fact a recent OIG cases resulted in numerous arrests and an estimated loss of $1.25 billion. The high stakes of these cases have sparked a heightened interest in what these concepts mean, and what they’ll become. Under various insurance plans, and even Medicare, telemedicine is a covered service.  Although the rules may differ from plan to plan (and Medicare’s rules are the subject of ongoing discussion and changes, and involve physical location of the Medicare beneficiary), one salient point will always be important; there is a doctor-patient relationship.  The premise of that relationship may be short (the instance where the patient and doctor communicate for the first time as part of the encounter via electronic medium, or an in-person visit to an urgent care center or emergency department), or may be an existing relationship, where the doctor uses technology to interact with their established patient.  In any event, the cases that are making their way into the spotlight are those where the doctor-patient relationship just does not exist.

The fraud schemes can really vary on their level of ingenuity.  It can be as simple as paying a healthcare provider a kickback for their signature on a piece of durable medical equipment (DME) or a prescription.  That prescription then makes its way to the supplier or pharmacy, and the fraudulent claim is filed.  In more robust schemes, call centers that make unsolicited calls to beneficiaries of Medicare and commercial plans seeking to get the beneficiary to agree to an item or prescription they just do not need.  I have listened to hundreds, if no thousands, of these call center recordings.  What I found to be the most overwhelming consistency, was the fact that patients often were talked into a particular product; usually one that cost more than another.

One of my favorite examples is the pervasive prescribing of a topical medication that comes in an over the counter and prescription version.  The over the counter version is commercially available and can be purchased at a very low cost.  The prescription version is not that much stronger but can cost hundreds of dollars more.  I have spoken to beneficiaries who received as many as seven tubes of this topical medication, which would cover their entire body multiple times over.  Unscrupulous providers are emailed the prescriptions, have no contact with the beneficiary, sign the prescription using some limited medical history that is obtained by the call center, and send the prescription back to a sales and marketing firm that is engaged in the fraud in conjunction with the call center and the dirty pharmacy or other supplier.

The scheme is perpetuated even further by the fact that the sales and marketing companies will target specific types of insurance, based on the ability of that insurance to pay the most for the prescribed medication.  This was, and is, particularly the situation with compounded medications.  In New Jersey, a sales and marketing company was targeting a particular profession, knowing that the profession had an insurance that paid a high reimbursement for the medication.  The sales and marketing company held “health fairs,” and touted the benefits of the compounded medications to the attendees.  Thankfully, many insurance plans have evolved to place dollar limited, amounts, ingredients and other types of edits in place to work to stem the fraud on these types of prescriptions.  Telemedicine is a useful, cost effective measure for healthcare, when performed properly.  The lack of any doctor-patient relationship can be identified via some data analytics.  Once the data demonstrates the lack of the relationship, the fraud is easily uncovered.  I can help understand that process, so please let me know if I can help demystify this for you.

Advize Health LLC is a healthcare advisory and consulting company that provides a breadth of healthcare industry services in the payer, provider, and legal communities. Contact Eric Rubenstein for more information on our Fraud Spotlight series.