On July 20, 2020, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released a special fraud alert targeting remuneration paid to physicians and other practitioners by telemedicine companies. As telemedicine use has increased exponentially over the last two years, so too have the proliferation of telemedicine marketing arrangements and the prosecution of these arrangements by OIG and federal law enforcement. OIG issued the fraud alert in conjunction with the announcement of a new $1.2 billion enforcement action regarding alleged telemedicine fraud.
Generally, the arrangements at issue involve a telemedicine company that may recruit both patients and physicians (or other practitioners). The telemedicine company then pays the physician to review some form of medical record, possibly contact the patient, and order some product or service, generally durable medical equipment (DME) or laboratory testing. OIG has taken the position that the fees paid to physicians and practitioners under these arrangements may constitute unlawful “remuneration” meant to induce or reward referrals under the Anti-Kickback Statute (AKS). Pursuant to the AKS, it is unlawful to knowingly and willfully solicit, receive, offer, or pay any remuneration to induce or reward, among other things, referrals for, or orders of, items or services reimbursable by a federal health care program.
OIG drafted the alert as a notice to physicians and other practitioners to be wary of certain characteristics in these arrangements. OIG outlined several ‘suspect characteristics’ that it believes may increase the risk of fraud and abuse in telemedicine arrangements: