Telehealth Fraud on The Rise, Whistleblowers Can Be Eligible for Rewards

Telemedicine has come to offer solutions for individuals who cannot visit a doctor’s office or hospital. For Americans living in scarcely populated areas, telehealth services can provide readily accessible diagnosis and consultation when there are no specialists nearby.  

In rural areas, in particular, telehealth consultations by Medicare beneficiaries are more frequent every day. Their number has grown from 7,000 instances in 2004 to 275,000 in 2016. Unfortunately, the success of telehealth has also attracted a large number of fraudsters. 

Telehealth fraud is now a common type of Medicare fraud. And just like fraud involving in-person consultations, medical tests, and treatments, telemedicine fraud can be reported under the False Claims Act. This means that telehealth fraud whistleblowers can be eligible for substantial rewards. 

Medicare is not the only government program reimbursing providers for telehealth services. Medicaid, TRICARE, and others also cover telehealth services, and they are equally vulnerable to fraud.

Telehealth providers can defraud the government in a variety of ways. One of the most common types of fraud involves billing the government for telemedicine services provided to a Medicare or Medicaid beneficiary who is not located at a certified rural site.

Our government is spending massive amounts of taxpayer dollars on telemedicine services. The VA’s estimated telehealth budget for 2020 surpasses one billion dollars. But these funds do not always serve their intended purpose.

The HHS Inspector General recently analyzed telehealth claims submitted to Medicare for reimbursement. Investigators concluded that about a third of the claims they reviewed did not meet the healthcare program’s requirements.

The Largest Telemedicine Fraud Case to Date - $1.2 Billion Loss

In April 2019, five telemedicine companies, several executives, dozens of durable medical equipment (DME) makers, and three medical professionals were indicted for their role in a massive telehealth fraud scheme involving kickbacks. The defendants allegedly defrauded the government out of $1.2 billion. 

Prosecutors claim the DME makers paid illegal kickbacks to “fraudulent telemedicine companies” in exchange for referrals of Medicare beneficiaries supposedly in need of back, shoulder, wrist, and knee braces,  which were, actually, medically unnecessary. 

According to the DOJ, “Some of the defendants allegedly controlled an international telemarketing network that lured over hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders,” the DOJ stated, “involving call centers in the Philippines and throughout Latin America. The defendants allegedly paid doctors to prescribe DME either without any patient interaction or with only a brief telephonic conversation with patients they had never met or seen.”

The most common types of telehealth fraud include upcoding, overbilling, illegal kickbacks, and billing for ineligible services. Individuals with original information about these illegal practices can enlist a whistleblower attorney and file a False Claims Act lawsuit. 

Under the False Claims Act, whistleblowers who report telemedicine fraud leading to a favorable settlement or verdict can receive up to 30 percent of the resulting recoveries.


Steve Halperin

New York trial attorney Steve T. Halperin is a well-known litigator with extensive knowledge of whistleblower laws and the New York False Claims Act. He has 28 years of experience as one of New York’s top tier attorneys. From the Manhattan offices of HalperinBikel, Steve’s whistleblower cases can run the gamut from lawsuits against healthcare. Whistleblowers: A New Yorker’s Step By Step Guide systems and providers cheating on New York Medicaid to private companies providing worthless services, or false billings by government contractors. With hundreds of winning verdicts and favorable settlements in healthcare and corporate cases, attorney Halperin’s meticulous preparation, courtroom acuity, and client-centered professionalism create remarkable outcomes.

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