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COVID-19 ISO Insights

DOJ Alleges Losses Over $1 billion From COVID-19, Telemedicine Fraud and Illegal Opioid Prescriptions

November 8, 2021

By Christopher Sirota, CPCU

Key Takeaway: The Department of Justice (DOJ) has announced cases that allege fraudulent schemes involving billions of dollars in losses in falsely-billed government health insurance claims related to COVID-19 healthcare and telemedicine; the DOJ also announced cases alleging the prescription of 12 million illegal doses of opioids and other narcotics.

The DOJ, in collaboration with the Centers for Medicare & Medicaid Services, the U.S. Department of Health and Human Services, and the Office of Inspector General, announced cases against 138 defendants including 42 medical professionals related, in part, to COVID-19 healthcare, telemedicine, and illegal opioid prescriptions.

Telemedicine

According to the  American Telemedicine Association (ATA), "telemedicine" is defined as "the use of medical information exchanged from one site to another via electronic communications to improve a patient’s clinical health status." Telemedicine as such does not constitute a separate medical specialty, but rather refers to how healthcare institutions and medical practitioners deliver clinical care. Telemedicine includes real-time video or mobile app interactions between patient and provider done electronically instead of in-person.

According to the DOJ's announcement, the cases alleging telemedicine fraud totaled over $1.1 billion in falsely billed claims. The DOJ alleges that claimants used either brief telemedicine visits with patients or non-existent telemedicine visits as means to order medical supplies or tests; the DOJ explain further that:

Durable medical equipment companies, genetic testing laboratories, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes and submitted over $1.1 billion in false and fraudulent claims to Medicare and other government insurers. In some instances, medical professionals billed Medicare for sham telehealth consultations that did not occur as represented. The proceeds of the scheme were spent on luxury items, including vehicles, yachts, and real estate.

COVID-19

Relatedly, during the pandemic public health emergency Medicare expanded some telemedicine services to address COVID-19. The DOJ's announcement includes cases in which they allege nine defendants took advantage of such expansion of the telemedicine rules and:

allegedly misused patient information to submit claims to Medicare for unrelated, medically unnecessary, and expensive laboratory tests, including cancer genetic testing.

The false billings allegedly totaled over $29 million.

(Read about a similar DOJ telemedicine and lab case in Florida here.)

Opioids

The DOJ's announcement also included cases alleging that 19 defendants including medical professionals illegally prescribed and/or distributed opioids and other narcotics; they allegedly submitted more than $14 million in false Medicare billings for over 12 million doses.

See also:

Executive Summary: Tracking Telehealth Changes State-by-State in Response to COVID-19 - October 2021

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