On November 18, 2024, the US Attorney for the Western District of Michigan announced criminal convictions and civil settlements as part of the second wave of actions against doctors involved in nationwide telemedicine fraud schemes. These doctors were accused of ordering medically unnecessary orthotic braces and genetic tests, allegedly wasting Medicare dollars to enrich themselves. This enforcement action is part of Operation “Happy Clickers,” a joint initiative involving the US Attorney’s Office, the US Department of Health & Human Services’ Office of the Inspector General (HHS-OIG), and the Federal Bureau of Investigation (FBI).
The new enforcement actions include civil settlements with five doctors and criminal convictions against two.
As part of this second wave, Doctor A, formerly of Kalamazoo, MI, and Doctor B, formerly of Mt. Pleasant, MI, each pleaded guilty to one count of making a false statement related to healthcare matters. Both doctors admitted using a telemedicine program to authorize medical orders for patients they never met or examined, approving most orders in mere seconds. In addition to their criminal convictions, each doctor agreed to pay civil settlements based on the scope of the fraudulent orders they signed and their ability to pay. Doctor A agreed to pay $50,000, and Doctor B agreed to pay $150,000.
The United States also reached civil settlements with three other physicians. Doctor C of Traverse City, MI, agreed to pay $295,192.93 to resolve allegations that he used a telemedicine program to order over 1,300 medically unnecessary orthotic braces. Doctor D of Battle Creek, MI, agreed to pay $85,822 to resolve allegations that he likewise ordered over 800 medically unnecessary braces. Doctor E, formerly of Kalamazoo, MI, agreed to pay $80,000 to resolve similar allegations regarding several hundred orthotics claims, based on ability to pay.
Doctor A is scheduled to be sentenced on February 10, 2025, and Doctor B is scheduled to be sentenced on February 18, 2025.
These actions follow nationwide takedowns of so-called “marketers” and owners of medical supply companies and genetic testing laboratories, who worked together to conduct large-scale schemes to defraud Medicare. The marketers, often operating through overseas call centers, contacted Medicare beneficiaries to gather sufficient personal information. This allowed them to fill out fraudulent medical orders for orthotic braces and genetic testing. These fraudulent orders were then sold to medical supply companies and laboratories, violating federal anti-kickback laws. In exchange, the doctors were paid to approve the orders through telemedicine programs, despite never meeting or examining the patients.
Federal investigators initiated this inquiry based on a detailed review of Medicare data relating to these expensive braces and genetic tests, which can cost more than $8,000 per test. Including the criminal pleas and civil settlements, prosecutors handling Operation “Happy Clickers” have resolved cases involving nine separate doctors and nurse practitioners, who were responsible for ordering over $10.5 million in alleged losses to the Medicare Program.
Through both rounds of enforcement actions, the United States has recovered over $1,000,000 for the Medicare Program in civil settlements, in addition to restitution that has been and is expected to be ordered in the criminal cases.
“Physicians and other providers who authorize medically unnecessary equipment and services undermine our healthcare system and waste valuable taxpayer dollars,” said Mario M. Pinto, Special Agent in Charge of the HHS-OIG. “Our agency is committed to ensuring that those who engage in this conduct are identified and, in conjunction with our law enforcement partners, the resources of our judicial system are brought to bear.”
Compliance Perspective
Issue
The OIG has conducted dozens of investigations of fraud schemes involving companies and individuals that purported to provide telehealth, telemedicine, or telemarketing services and exploited the growing acceptance and use of telehealth. These schemes raise fraud concerns because of the potential for considerable harm to federal healthcare programs and their beneficiaries, which may include: (1) an inappropriate increase in costs to federal healthcare programs for medically unnecessary items and services and, in some instances, items and services a beneficiary never receives; (2) potential to harm beneficiaries by, for example, providing medically unnecessary care, items that could harm a patient, or improperly delaying needed care; and (3) corruption of medical decision-making. Practitioner arrangements with telemedicine companies may also lead to criminal, civil, or administrative liability under federal laws including, for example, the federal anti-kickback statute, OIG’s exclusion authority related to kickbacks, the Civil Monetary Penalties Law provision for kickbacks, the criminal healthcare fraud statute, and the False Claims Act.
Discussion Points
- Review policies and procedures regarding the use of telemedicine within the facility and preventing fraud, waste, and abuse. Also review your policies and procedures for operating an effective compliance and ethics program to ensure that the identifying and reporting of false claims or kickbacks is part of your policy.
- Provide education to nursing and business office personnel on their responsibility to identify and report any concerns that unnecessary medications, treatments, supplies, or equipment are being ordered for residents. 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. 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.
- Conduct regular audits to ensure appropriate use of telemedicine tools and verify that staff are not involved in bribery or kickbacks. Also, assess staff awareness of their responsibility to report compliance and ethics concerns to their supervisor, the compliance and ethics officer, or via the anonymous hotline.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*
