OIG Warns of Telemedicine Fraud Schemes


With the growing prevalence of telemedicine comes a growing risk of fraud.

The Department of Health and Human Services’ Office of Inspector General (OIG) released only its fifth Special Fraud Alert since 2003 this year to address concerns surrounding telemedicine schemes. The explosion of crucial telemedicine services since the beginning of the COVID-19 pandemic has created more opportunities for patients and providers to connect, but it has also introduced a vulnerability for practitioners who do not carefully evaluate their partnerships with telemedicine service providers.

Many of these schemes investigated by the OIG involved paid kickbacks to practitioners for ordering prescriptions or other medically unnecessary medical equipment, testing, or wound care items, as well as items & services never received in some cases. These orders resulted in fraudulent claims to federal health care programs including Medicare and Medicaid. These fraudulent telemedicine schemes not only put patients at risk, but also increase the costs of federal health care programs overall.

Legal Risk

There are multiple statutes guarding against these schemes, including: the federal anti-kickback statute, OIG’s exclusion authority on kickbacks, Civil Monetary Penalties Law provision for kickbacks, the criminal healthcare fraud statute, and the False Claims Act.

Providers who engage in these telemedicine fraud schemes, whether knowingly or unknowingly, may be held criminally or civilly liable. Take special care to review with your legal counsel all arrangements with telemedicine companies for any of the below characteristics, as well as to ensure your organization meets all local, state, and federal regulations. The OIG’s Special Fraud Alert is not meant to caution against legitimate arrangements in the growing and crucial telemedicine industry.

What should providers look out for?

The OIG released seven suspicious characteristics of the telemedicine fraud schemes they investigated. Providers should look for one or multiple of these when evaluating telemedicine services:

  • The patients were recruited by the telemedicine company, telemarketing company, sales, recruiters, call centers, health fairs, or through advertising online or via television with the offer of low-cost goods and services.
  • There is insufficient information made available about the patient to the practitioner, whether their medical records or their contact information, to confirm medical need for goods and services.
  • Practitioners are offered “kickbacks,” or compensation by the telemedicine company, based on the number of items and services prescribed and provided. This may be presented to the practitioner as compensation based on the number of records reviewed.
  • The telemedicine company may only accept patients/beneficiaries of federal health care programs, rather than private insurance.
  • The telemedicine company may claim to only accept patients/beneficiaries who are not in federal health care programs (but they may still bill federal health care programs).
  • The telemedicine company may only offer one product or type of products, such as diabetic supplies, prescription creams, genetic testing, etc. which may inhibit a practitioner’s treatment options.
  • The telemedicine company does not expect practitioner follow-up with the patients for whom they have prescribed medicines or services, or does not provide the practitioner with the information necessary to follow up with the patient.

What should providers do if they suspect fraudulent behavior?

Report any suspicious telemedicine arrangements to the OIG, particularly if one of the above characteristics is present. They have set up the following hotline online or by phone:

Online: https://oig.hhs.gov/fraud/report-fraud

Phone: 1-800-447-8477 (1-800-HHS-TIPS)