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Telemedicine and Workers’ Compensation Fraud

Written by: Denise L. Dawson, Esq.

Florida has taken steps to move forward into an enlightened age of technology but may be setting itself up for increased fraud from unscrupulous actors. As recently as last month, the State’s Chief Financial Officer, Jimmy Patronis, issued a statement on April 7, 2020 urging health insurers to take full advantage of technology and broaden the use of telemedicine. This was on the heels of the Centers for Medicare and Medicaid Services lifting some federal regulations to accommodate the increased use of telehealth services, although the Department of Health and Human Services voiced concerns that the relaxed requirements may open the door for increased fraud.

Telehealth, or telemedicine, as it is also known, covers a broad range of services via video, telephone or email. In early March, the Centers for Medicare & Medicaid Services approved dozens of new billing codes to allow medical professionals to bill for these services. That means patients can consult with doctors about everything from flu symptoms, back pain or a psychiatry visit. In Florida, payment for telehealth visits are limited to video and/or telephone services. E-mail and faxes are not considered telehealth services.

Congress did much to speed acceptance of telehealth as part of the $2 trillion stimulus package. The CARES Act awards $200 million through the Federal Communications Commission to medical groups to help them install technology and fund broadband installations. Medical groups also can apply for $27 billion in a public health emergency fund.

While not having to make a physical trip to meet in person with a provider is more convenient, they are more susceptible to fraud in a virtual world. Unscrupulous providers can operate on a large scale from anywhere without being detected, and often it is difficult to verify the validity of a call or email. Even before the pandemic, some of the largest healthcare fraud cases by number of people charged and the amount of money fraudulently billed involved the use of telehealth. According to an unclassified FBI Intelligence Report dated April 8, 2020, health care fraud threat actors almost certainly exploit telemedicine to purchase doctors’ orders for medically unnecessary products and services, thereby defrauding government and insurance plans throughout the United States of billions of dollars.

Last April, indictments were handed down against 24 defendants associated with five telehealth companies and dozens of durable medical equipment companies across multiple states. The case involved $1.2 billion in fraud charges. In September of 2019, indictments were issued against 35 defendants associated with dozens of telemedicine companies and genetic testing laboratories. That case involved $2.1 billion in fraudulent charges and was one of the largest frauds in U.S. history.

Mike Cohen, an operations officer with the Health and Human Services Inspector General’s Office, expressed concerns of the potential increase in fraud. “There are unscrupulous providers out there, and they have much greater reach with telehealth,” he said. Cohen went on to say that while the intention of the new requirements was to be a temporary measure, the “guardrails have been removed under this epidemic. The concern is that things will never go back to what they were. … There will be a lot of pressure on CMS to make at least some of these changes permanent.”

The most common examples of medical fraud include billing for services that were not provided, sending patients to provider owned facilities, submitting bills for more services than are possible in a day, providing services unrelated to an injury, using non-credentialed individuals, and receiving kickbacks.

Most providers do not commit fraud but those who do are quite costly for insurers and the employers. According to the National Insurance Crime Bureau, workers’ compensation medical fraud costs almost $30 billion a year in the United States.

In addition to fraudulent billing, concerns in Florida are the prescription of opioids via virtual means and the relaxation of licensing requirements for providers that practice across state lines. In 2018, data from the Centers for Disease Control and Prevention (CDC) reveals that there were approximately 4,700 opioid deaths in Florida. The relaxing of these two requirements in particular, could lead to increases in the length of time a worker is out of work and lead to even an even greater number of healthcare fraud cases, exponentially increasing costs to the insurer and the employer.