TELEMEDICINE FRAUD AND KICKBACKS

The Firm has substantial experience representing individuals and corporate entities in connection with suspected telemedicine fraud and has represented individuals and marketers  accused of fraud who entered into marketing agreements with telemedicine providers.

The Government’s investigations focusing on telemedicine fraud have resulted in several indictments and a nationwide raid known as Operation Brace Yourself spanning from Tampa to San Diego to outside of the United States and another complex operation known as Operation Double Helix which has resulted in several recent indictments in Georgia.

Common themes in the government’s investigations and prosecutions of telemedicine fraud include:

Doctor patient relationship: The Government frequently takes the position in these telemedicine fraud investigations that there is no real doctor patient relationship. One common argument is that the consultation between the doctor and the patient took place on the telephone and not through some type of video or virtual technology enabling the physician to conduct a physical examination. What constitutes a valid doctor patient relationship depends on the applicable state law and the state laws governing telemedicine vary widely. Further, complicating matters, a state law may recognize a doctor patient relationship under a particular scenario, but the government or private payer may have specific laws or rules governing when they will reimburse for services or items provided pursuant to a telemedicine consultation.

In the Firm’s view, absent egregious fraud or false certifications about seeing a patient where no doctor-patient communication truly takes place, the validity of a doctor patient relationship is an issue which is properly subject to the applicable boards of medicine since, establishing a valid relationship is the obligation and duty of the physician. Telemedicine providers and others acting in good faith should not be tasked with babysitting doctors to ensure that the doctors do not run afoul of their professional obligations to patients.

Medically Unnecessary services: In most of the telemedicine fraud investigations, in addition to taking the position that there was no valid doctor patient relationship, the government consistently asserts that the services provided are medically unnecessary especially where, for example, there are multiple prescriptions for multiple drugs.

Out of State patients and prescriptions: Many of the investigations involve patients receiving medications (compound medications such as creams and gels) or back, ankle, or neck braces (durable medical equipment), or genetic tests for cancer (CGx) where the patient resides in one state and the provider (laboratory, durable medical equipment provider, or compounding pharmacy) resides in another state.

Consultation Fees: A common theme in some of these telemedicine fraud investigations is that the marketing entity will purchase, in advance, a set amount of telemedicine consultations from the telemedicine company as a “consultation fee.” The Government has taken the position that these consultations fees are kickbacks.

In the Firm’s view, this is short-sighted and reveals a lack of understanding about how certain kickback laws and safe harbors operate to protect health care providers.

Sales and marketing arrangements: The Government is also focused on whether the marketers were performing bona-fide marketing services; whether the marketers paid based on the time devoted to marketing; and whether they were paid per test, per order, per prescription, or were paid a commission tied to total reimbursement from government or private payers.

Waivers of copays: Copays continue to be a focus in these telemedicine fraud and kickback investigations. The government is asking: did the patient pay for the copay for the telemedicine consultation or was it waived? If no copay were collected at the time of the telemedicine consult, were any efforts made to collect the copay and if so by whom?

Lead Generation Companies:  In some of the telemedicine fraud investigations, the Government has targeted lead generation companies and has focused on how patients were contacted about the specific item or service (braces, gels, creams, genetic tests, diabetic tests) and where the patient information came from (insurance information, patient health information).

“Call Rooms”: The Government is focused on whether patients were contacted through a “cold call” because the patient appeared on a list. In these telemedicine fraud investigations, the caller might complete or “triage” the information provided by the patient such as name, date of birth, diagnosis (pain, allergies, high blood sugar, scars), and insurance information.

The government is also focused on what was communicated to the potential patient during these calls: was the patient promised anything of value; was the patient promised a “free doctor consultation” or a “gift card”; was the patient informed about any applicable copay they might have to pay.

Calling prospective patients is not per se illegal or even unethical. Thus, the government appears most interested in whether the patients were offered anything of value during the calls or what representations were made to them.

Compound Medications, Braces, Genetic Tests: Telemedicine fraud investigations are most prevalent with respect to back and neck braces (durable medical equipment), compound medication such as scar cream, wrinkle cream, and pain cream and genetic tests, such as tests for cancer.

Telemedicine Doctors: Although telemedicine cannot occur without a physician at one end of the consultation, many of the Government investigations into telemedicine fraud have not focused on the physicians absent fraudulent certifications. Physicians are typically paid a flat fee which is set in advance and which is tied to the amount of patient consultations a physician completes. Nonetheless, how many patient orders or how many patient consultations a physician might complete in a day is relevant. For example, a physician might complete 100 consultations per day and the government might view those consultations and the services provided as unnecessary.

Despite the resources of the federal government, there are numerous defenses in telemedicine fraud and kickbacks investigations and prosecutions. Any federal fraud statute requires proof beyond a reasonable doubt that the person specifically intended to defraud a health care benefit program. The Anti-Kickback statute is also a highly technical statute, as are state anti-kickback laws which vary, and clients can potentially raise several defenses including a safe harbor defense, the good faith defense, and/or an advice of counsel defense, where applicable. Moreover, if the case were to proceed to trial, federal courts often provide the jury with a specific defense instruction which is narrowly tailored to the specific client and the specific facts.

The Firm has substantial experience in representing individuals and corporations in telemedicine fraud and kickback matters.