More Than 100 Medical Professionals Charged in Telemedicine Fraud

Alicia Ault

October 02, 2020

The US Department of Justice (DOJ) is charging 345 individuals — including more than 100 physicians, nurses, and other licensed medical professionals — with submitting more than $6 billion in false and fraudulent claims to federal health programs and private insurers.

The lion's share of the fraudulent claims — $4.5 billion from 86 defendants — was for telemedicine services. Almost $900 million was for substance use disorder treatment in so-called sober homes.

Another $800 million in false claims was connected to illegal opioid distribution and other types of healthcare fraud, a statement from the federal law enforcement agency notes.

"These cases hold accountable those medical professionals and others who have exploited health care benefit programs and patients for personal gain," said Acting Assistant Attorney General Brian C. Rabbitt in the DOJ's statement.

The DOJ also said it was creating a National Rapid Response Strike Force in its healthcare fraud unit, which will investigate and prosecute fraud cases involving major healthcare providers that operate in multiple jurisdictions. The strike force led the telemedicine fraud investigation and was a co-leader in the sober home cases.

Sober Home Schemes

The federal government said it was charging more than a dozen individuals for seeking reimbursement for more than $845 million of allegedly false and fraudulent claims for tests and treatments for patients seeking treatment for drug and/or alcohol addiction.

Those charged include doctors, owners and operators of substance abuse treatment facilities, and patient recruiters across 51 jurisdictions. The recruiters allegedly received kickbacks for referring patients to facilities where patients often underwent medically unnecessary drug testing and charged for therapy sessions that frequently were not provided. The clinicians also allegedly prescribed medically unnecessary controlled substances and other medications to these patients.

Sometimes patients were discharged and admitted to other facilities or were referred to other laboratories and clinics in exchange for more kickbacks, the federal government reports.

The biggest sober home case was announced in August, when Michael Ligotti, DO, was charged with a scheme to defraud the government and private insurers of $681 million for medically unnecessary urine drug tests, blood tests, psychiatric testing, prescription drugs, and other services. Ligotti's lawyer has denied the charges.

Opioids, Kickbacks

The government said that it had charged or received guilty pleas from 240 individuals who pled guilty to cases involving illegal prescription and/or distribution of opioids or more traditional healthcare fraud involving $800 million in false claims to Medicare, Medicaid, TRICARE, and private insurers. Many of the cases involved kickbacks paid to healthcare professionals.

The cases allege that healthcare professionals and others were involved in the distribution of more than 30 million doses of opioids and other prescription narcotics.

In Alabama, two defendants were charged in connection with illegally distributing more than 50,000 opioids.

The government charged a Colorado doctor for his alleged participation in a kickback scheme with a pharmaceutical company. The physician was allegedly paid $300,000 to deliver more than 100 "speaker programs."

The money, labeled as "honoraria," was actually a series of bribes to prescribe the company's sublingual fentanyl spray, said the DOJ. Medicare and the state's Medicaid program paid more than $4 million for the prescriptions.

A Massachusetts psychiatrist and his wife ― who operated two psychopharmacology clinics — were charged with illegally importing unapproved drugs, which they administered to dozens of patients to curb withdrawal symptoms. Many of the patients allegedly experienced adverse effects.

The US Health and Human Services (HHS) Office of Inspector General, which took part in the overall fraud operation, said telehealth fraud has been on the rise since 2016.

"Unfortunately, bad actors attempt to abuse telemedicine services and leverage aggressive marketing techniques to mislead beneficiaries about their health care needs and bill the government for illegitimate services," said HHS Deputy Inspector General Gary Cantrell in remarks announcing the charges.

The Centers for Medicare & Medicaid Services (CMS) and the HHS inspector general collaborated in monitoring what appeared to be suspicious claims and acted on tips from Medicare and Medicaid beneficiaries. The federal government alleges that the telemedicine companies hired international marketing networks that used calls, direct mail, television ads, and Internet pop-up ads to target beneficiaries.

Confirmed Medicare or Medicaid recipients would then be transferred to a medical practitioner who was being paid by the company to issue prescriptions for medications, lab tests, or durable medical equipment (DME). The telemedicine company would then sell those prescriptions to pharmacies, labs, or DME companies, which would send the prescription to the beneficiary.

This occurred either without any patient interaction or with only a brief telephone conversation with patients. Often, said the DOJ, the DME, test results, or medications were not provided to the beneficiaries or were worthless to patients and their actual doctors. But the pharmacy, lab, or equipment supplier billed Medicare or Medicaid and gave the telemedicine company a kickback.

The DOJ alleges that the proceeds from the fraudulent scheme were laundered through international shell corporations and foreign banks for the benefit of the telemedicine executives.

Separately, the CMS Center for Program Integrity announced that it was revoking 256 additional medical professionals' Medicare billing privileges because of their involvement in such telemedicine schemes.

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