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OIG Telemedicine Fraud Alert

On July 20, 2022, the Department of Health and Human Services, Office of Inspector General (OIG) released a Special Fraud Alert entitled “OIG Alerts Practitioners To Exercise Caution When Entering Into Arrangements With Purported Telemedicine Companies.”

Fraud Schemes Investigated

The OIG investigated companies for fraud schemes involving telehealth, telemedicine or telemarketing services (collectively, Telemedicine Companies). One common element the OIG identified in the fraud schemes was Telemedicine Companies using kickbacks to recruit and reward practitioners.

These kickbacks may violate multiple federal laws, including the federal anti-kickback statute, and individuals or entities on both sides of an impermissible kickback transaction may be liable.

The fraud schemes took several forms, including Telemedicine Companies paying physician and non-physician practitioners for ordering or prescribing items or services for patients with whom practitioners have little to no contact or for whom the prescribed item or service is not medically necessary.

The OIG identified three potential harms these actions may have on federal health care programs or beneficiaries, including (1) in-creases in costs; (2) providing unnecessary care that harms a patient or delays needed care; or (3) corrupting the medical decision-making process.

Suspect Characteristics

The OIG created a non-exhaustive list of characteristics that practitioners should be aware of prior to entering into any arrangements with Telemedicine Companies. These characteristics include:

1.    Patients identified or recruited through a Telemedicine Company, telemarketing company, sales agent, recruiter, call center, health fair and/or through internet, television or social media advertising for free or low-cost items or services;

2.    Insufficient contact between the patient and practitioner so that the practitioner can¬not meaningfully assess the patient’s medical necessity for the ordered or prescribed item(s);

3.    Practitioner compensation structures based on the volume of items or services prescribed;

4.    Telemedicine Companies that furnish items or services solely to federal health program beneficiaries;

5.    Telemedicine Companies that claim not to furnish items or services to federal health care program beneficiaries, but in fact bill federal health care programs; and

6.    Telemedicine Companies that potentially restrict practitioner treatment options by only furnishing one product or single class of products.

The OIG warned that any single factor is not decisive in determining whether a practitioner’s arrangement with a Telemedicine Company runs afoul of federal laws. However, practitioners should use heightened scrutiny in consideration of the above factors when reviewing the parameters of any similar arrangement.

Tonya Foley
410-576-4238 • tfoley@gfrlaw.com


March 20, 2023




Foley, Tonya R.


Health Care