The Department of Justice announced criminal charges against 36 defendants in 13 federal districts across the United States for more than $1.2 billion in alleged fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment (DME) schemes.
The nationwide coordinated law enforcement action includes criminal charges against a telemedicine company executive, owners and executives of clinical laboratories, durable medical equipment companies, marketing organizations, and medical professionals. In connection with the enforcement action, the department seized over $8 million in cash, luxury vehicles, and other fraud proceeds.
Additionally, the Centers for Medicare & Medicaid Services (CMS), Center for Program Integrity (CPI), announced that it took administrative actions against 52 providers involved in similar schemes.
The coordinated federal investigations primarily targeted alleged schemes involving the payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for the referral of patients by medical professionals working with fraudulent telemedicine and digital medical technology companies. Telemedicine schemes account for more than $1 billion of the total alleged intended losses associated with the enforcement action. These charges include some of the first prosecutions in the nation related to fraudulent cardiovascular genetic testing, a burgeoning scheme. As alleged in court documents, medical professionals made referrals for expensive and medically unnecessary cardiovascular and cancer genetic tests, as well as durable medical equipment. For example, cardiovascular genetic testing was not a method of diagnosing whether an individual presently had a cardiac condition and was not approved by Medicare for use as a general screening test for indicating an increased risk of developing cardiovascular conditions in the future.
One particular case involved the operator of several clinical laboratories, who was charged in connection with a scheme to pay over $16 million in kickbacks to marketers who, in turn, paid kickbacks to telemedicine companies and call centers in exchange for doctors’ orders. As alleged in court documents, orders for cardiovascular and cancer genetic testing were used by the defendant and others to submit over $174 million in false and fraudulent claims to Medicare—but the results of the testing were not used in treatment of patients. The defendant allegedly laundered the proceeds of the fraudulent scheme through a complex network of bank accounts and entities, including to purchase luxury vehicles, a yacht, and real estate. The indictment seeks forfeiture of over $7 million in United States currency, three properties, the yacht, and a Tesla and other vehicles.
Some of the defendants charged in this enforcement action allegedly controlled a telemarketing network, based both domestically and overseas, that lured thousands of elderly and/or disabled patients into a criminal scheme. The owners of marketing organizations allegedly had telemarketers use deceptive techniques to induce Medicare beneficiaries to agree to cardiovascular genetic testing, and other genetic testing and equipment.
The charges also allege that the telemedicine companies arranged for medical professionals to order these expensive genetic tests and durable medical equipment regardless of whether the patients needed them, and that they were ordered without any patient interaction or with only a brief telephonic conversation. Often, these test results or durable medical equipment were not provided to the patients or were worthless to their primary care doctors.
Issue:
Nursing staff should monitor telemedicine appointments held with their residents, review related medical record documentation, and report any concerns with observed practices immediately. Failure by nursing homes to ensure that telemedicine providers are not abusing this tool by offering and paying bribes and kickbacks to those who then submit false claims to Medicare, Medicaid, and other federal health programs may result in the facility and those other healthcare providers being excluded as participants from the programs by the OIG and CMS.
Discussion Points:
- Review policies and procedures regarding the use of telemedicine within the facility and related requirements for preventing fraud, waste, and abuse of government funds.
- Train staff about fraud, waste, and abuse and the prohibition regarding acceptance of illegal kickbacks and bribes in exchange for ordering medical equipment, performing lab tests, prescribing medications, and other activities. Provide training to staff who facilitate telemedicine appointments in your facility so they understand how these are to occur and what should be documented. Staff who observe or reasonably suspect that kickbacks and bribes are being offered or accepted should report such suspicions to their supervisor or through the facility’s Hotline.
- Periodically audit to determine if telemedicine tools are being used appropriately and that facility personnel or other agents are not being offered or accepting bribes or kickbacks.
