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The Goodman Institute Health Blog

The Downside of Telemedicine: Tele-Fraud

Posted on July 20, 2022 by Devon Herrick

The Justice Department announced criminal charges in a $1.2 billion telemedicine fraud scheme committed by numerous individuals across the United States. In  some cases the owners of clinical labs are accused of paying kickbacks to marketers, who in turn paid bribes to telemedicine companies in return for physician orders.

As alleged in court documents, orders for cardiovascular and cancer genetic testing were used by the defendant and others to submit over $174 million in false and fraudulent claims to Medicare—but the results of the testing were not used in treatment of patients.

In other cases, defendants who controlled telemedicine companies tricked seniors and disabled patients into unnecessary clinical testing.

Some of the defendants charged in this enforcement action allegedly controlled a telemarketing network, based both domestically and overseas, that lured thousands of elderly and/or disabled patients into a criminal scheme. The owners of marketing organizations allegedly had telemarketers use deceptive techniques to induce Medicare beneficiaries to agree to cardiovascular genetic testing, and other genetic testing and equipment.

In addition to unnecessary lab tests telemedicine firms also bribed medical providers to order costly durable medical equipment for seniors that was billed to Medicare. Tests and equipment were ordered after only a brief telephone call and often with no patient interaction at all. The medical equipment was never actually delivered to patients and the tests were of no use to patients’ primary care physicians. It’s not clear that all the tests billed to Medicare were actually performed.

Just as the telephone and the internet makes remote work possible, it also make remote fraud possible. Telemedicine has become a method to commit fraud against Medicare with patients unaware they’re being used.

Today’s announcement builds on prior telemedicine enforcement actions involving over $8 billion in fraud, including 2019’s Operation Brace Yourself, 2019’s Operation Double Helix, 2020’s Operation Rubber Stamp, and the telemedicine component of the 2021 National Health Care Fraud Enforcement Action.

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For many years, our health care blog was the only free enterprise health policy blog on the internet. Then, when the NCPA closed its doors, the health blog stopped as well.

During this five-year hiatus no one else has come forward to claim the space. So, my colleagues and I have decided to restart the blog in connection with the Goodman Institute. We invite you and others to use this forum to share your views.

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