Dive Brief:

• The Justice Department has announced criminal charges against 36 defendants for fraudulent telemedicine, cardiovascular and cancer genetic testing and durable medical equipment schemes adding up to more than $1.2 billion.
• The enforcement action primarily targets laboratory owners and operators who paid illegal kickbacks and bribes in exchange for patient referrals from doctors working with fraudulent telemedicine and digital medical technology companies.
• Telemedicine schemes made up more than $1 billion of the targeted losses, regulators said on Wednesday.

Dive Insight:

Regulators are cracking down on rising fraud in the healthcare industry. Earlier this month, the federal government announced it brokered more than $5 billion in healthcare fraud judgments and settlements in 2021 — the largest amount ever in the history of the HHS and Department of Justice’s fraud and abuse enforcement program.

The new enforcement action targets defendants including a telemedicine executive, clinical laboratory management, DME companies, marketing organizations and doctors, regulators said.

Charges allege that the telemedicine companies arranged for doctors to order expensive genetic tests and DME regardless of whether they were needed, often without patient interaction or only a brief telephone call. In some cases, the test results or medical equipment weren’t even provided to patients.

Some of the defendants allegedly operated a telemarketing network that lured thousands of elderly and disabled patients into the scheme, deceiving them into agreeing to cardiovascular genetic testing, regulators said.

Cardiovascular genetic testing is not a method of diagnosing a cardiac condition, and isn’t approved by Medicare as a screening test for cardiovascular risk.

It’s some of the first U.S. prosecutions related to fraudulent cardiovascular genetic testing, the DOJ said, calling it a “burgeoning scheme.”

In one case, a clinical laboratory operator allegedly paid more than $16 million in kickbacks to marketers who then paid kickbacks to telemedicine companies and call centers in exchange for doctor’s orders. That defendant then submitted over $174 million in false claims to Medicare, and allegedly used the proceeds to purchase three real estate properties and luxury vehicles including a Tesla car and a yacht.

CMS’ oversight arm also took administrative action against 52 providers involved in the schemes.

The DOJ’s prior telemedicine enforcement actions have involved more than $8 billion in fraud.

Before today’s charges, the Health Care Fraud Strike Force, which began in South Florida in 2007 in response to rising fraud, has charged more than 5,000 defendants who collectively billed public and private insurers $24.7 billion, the DOJ said.

The HHS warned providers to be on the lookout for telehealth fraud schemes in a special fraud alert posted to its website Wednesday. Warning signs include telemedicine companies identifying specific patients for a provider, urging doctors to prescribe items or services without sufficient knowledge of a patient, or compensating providers based on the volume of items of services ordered, the HHS said.

Fraudulent providers could be held liable under the False Claims Act, federal anti-kickback laws and other criminal statutes, the alert says.