Medical Practitioners Beware:  Telemedicine Schemes May Result in Unexpected Liability

Posted On Wednesday, July 27, 2022

Takeaway: Medical practitioners should exercise extreme caution when entering into telemedicine agreements, in order to avoid unintended civil and criminal consequences.  It is advisable to consult with an attorney before entering any such agreements.

On July 20th, the Office of Inspector General (OIG) issued a Special Fraud Alert, warning practitioners to exercise extreme caution when entering into arrangements with telemedicine companies.

After multiple investigations into fraud schemes involving companies that purport to provide telehealth, telemarketing, or telemedicine services, the OIG has found that many of these companies exploit medical practitioners who may unknowingly become entangled in fraudulent schemes.

The OIG has issued guidance warning practitioners of ways to identify telemedicine companies that may be engaging in illicit activity. The most common element of these schemes involves kickbacks – schemes wherein telemedicine companies pay practitioners in exchange for ordering or prescribing services that are either medically unnecessary or for patients with whom the practitioner has limited interaction.

OIG cautions medical practitioners to exercise extreme caution and be vigilant when entering into agreements with telemedicine companies. It is important that they be cautious because practitioners could ultimately find themselves criminally and civilly liable under multiple federal laws, including the Anti-kickback statute, fraud, and False Claims Act.

OIG has identified several “suspect characteristics” that can alert practitioners to these potentially dangerous and fraudulent arrangements. Those “suspect characteristics” include, but are not limited to, the following:

  • Patients identified or recruited by telemedicine companies, a telemarketing company, health fair, or through internet or social media advertising free or low-cost services.
  • The practitioner is not provided with sufficient information about the potential patient, that would allow the practitioner to independently assess the medical necessity of the services or items to be prescribed.
  • The telemedicine company compensates the practitioner based on volume.
  • The telemedicine company does not accept insurance from any other payor besides Federal health care programs.
  • The telemedicine company claims to only service individuals who are not Federal healthcare beneficiaries (but may, in fact, bill Federal health care programs).
  • The telemedicine company provides only one product or a single type of service, which may potentially restrict the practitioner’s treatment options to a particular type of treatment.
  • The telemedicine company does not expect the medical practitioner to follow up with patients after a visit, nor does it provide the practitioner with required information needed for such follow-up.

It is important to note that this is not an exhaustive list, and the presence of one or more of the above characteristics does not in itself create an assumption of wrongdoing on the part of a telemedicine company. However, it is imperative that practitioners protect themselves from unintended consequences of entering into what may initially appear to be a legitimate arrangement with a telemedicine company. The consequences for medical practitioners can be dire – including criminal, civil, and administrative liability. Medical practitioners considering partnerships with telemedicine companies would be wise to consult with an attorney before entering into any such agreement.

The official statement of the OIG can be read here

The attorneys at Pietragallo Gordon Alfano Bosick & Raspanti, LLP  are skilled at assisting health care providers in enhancing compliance and responding to government enforcement actions.  We assist clients in all 50 states, the District of Columbia, and abroad.