Fraud and Abuse: DOJ's Telemedicine Fraud Crackdown—What Providers Need to Know

In this episode of AHLA's monthly series on fraud and abuse issues, Matthew Wetzel, Associate General Counsel, Compliance Officer, GRAIL, speaks to John Kelly, Managing Partner, Bass Berry & Sims, about the government’s recent crackdown on telemedicine schemes, specifically schemes in which telemedicine companies work with physicians to write medically unnecessary orders without appropriate patient evaluation. They discuss DOJ’s specific allegations, how physicians were pulled into these schemes and the consequences they faced, and the lessons that providers can learn from these types of schemes. From AHLA's Fraud and Abuse Practice Group. Sponsored by BRG.

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Transcript

Speaker 1: 0:14

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Speaker 2: 0:33

Welcome to another edition of the American Health Law Associations Fraud Abuse Podcast. I'm your host, Matt Wetzel, and today is May 12th, 2021. This month we're talking about the government's recent crackdown on telemedicine schemes. More specifically schemes in which telemedicine companies work with physicians to write medically unnecessary orders, usually for durable medical equipment. And many times without appropriate patient evaluation, the company then pockets Medicare reimbursements for these unnecessary claims. And we've got the DOJ looking into the scheme today, we're looking for a few answers to some key questions. How were physicians pulled into these schemes? Who recruited them? What role did they play? And what consequences have they faced? And perhaps most importantly, what should providers know when it comes to looking for the warning signs of a potential fraud scheme like this one With us today is my good friend John Kelly, managing partner of Berry and Sims, Washington, DC office. John is no stranger to the health law community, and his experience speaks for itself. He's a former federal prosecutor, and now he represents companies and individuals and investigations, criminal pro prosecutions and civil litigation related to the healthcare fraud and abuse laws. John has also held several leadership positions with hla, including our fraud abuse practice group. And John, we're so excited to have you here. Thanks for speaking with us today. Welcome. Great man. Thanks so much. It's always, uh, always fun to, to get a chance to speak with you. For folks who dunno, Matt and I have, have often made the speaking circuit together on different panels at conferences, so always a pleasure to talk to you, my friend. Absolutely, absolutely. I feel the same way. And, uh, you know, we're, we're really excited to get your really important take on this issue and, uh, to hear your thoughts. So, you know, your, your, your experience as a litigator speaks for itself, John, and today's discussion is no different. I, I thought maybe we could start at the very beginning and you know what, I gave a little introduction, but what can you tell us about these schemes? How did they work? What kinda the behavior was DOJ looking to penalize here? Well, well, I think, you know, just at the start here, um, this is absolutely for, for folks who maybe have been sleeping through the pandemic, uh, you know, this is on the DOJs radar in a significant way. And we saw it in April, 2019, which, which, uh, with a takedown, national takedown, that was called Operation Brace Yourself. That was about 1.2 billion in improper billings. And that take down by the department and obviously working hand in hand with hhs, oig, cms, and other regulatory agencies focused on healthcare fraud and telemedicine in the DME industries. And then last year, in September of 2020, there was another significant takedown by DOJ also focused not just on telemedicine schemes, but telemedicine schemes that incorporated, uh, DME suppliers, genetic testing labs, substance abuse disorder, treatment industries. And, you know, I think what was unique about it is it wasn't really a focus on billing or coding for telehealth services. It was really what was coming out of the telehealth communications between providers and patients. It was really focused on the use of telemedicine as a platform to order medically unnecessary services and items that were ultimately billed to federal healthcare programs like orthotic braces. Um, you know, in that particular take down, there were 345 defendants charged. Ultimately, that included owners, that included executives of different companies, and it included providers. And I think what was most interesting about this was also that, not just that they had gone out and charged folks around the country, but in addition to those charges, there were another 250 medical professionals, and probably that number's even grown since then that had their Medicare billing privileges revoked in relation to this particular takedown and the different telemedicine schemes that were being operated. So you, you know, that that was just something we didn't typically see that type of volume of revocations in one matter mm-hmm.<affirmative>. And ultimately it was about 6 billion in total losses that the government, you know, attributed to these particular, uh, telemedicine scheme. So, um, long story short, uh, you know, just a lot of activity by doj and now in the fraud section, they even have an, an entire group that's just focused on these type types of telemedicine scans. Wow, that's interesting. And, and, uh, you know, I I I hadn't realized sort of the broad scope of, uh, you know, DOJs net in this area, including the telemedicine companies and the physicians and providers as well. And, and, and I think it's important to draw the distinction you did, John, between a billing scheme whereby, you know, you're not following the Medicare coverage requirement, let's say, versus the use of, of, of telemedicine as a tool to commit fraud. So what kinda allegations specifically did, uh, did, did DOJ have here? I mean, what, what, what was it that the providers were doing? What was it that the telemedicine companies were doing? Sure. And, and, and let me just, and Matt, before I sort of get into the weeds there, I, I think what was so intriguing about this case to to, to myself and some of my colleagues at, at Bass Barry who worked with me on this is shortly after the September, 2020 takedown, we just started getting, uh, uh, like an incredibly high volume of calls from physicians, uh, looking to be represented. I I wanna say somewhere, uh, you know, probably over 25. Um, and ultimately represented, we ended up representing a great deal of them. Others, we, we pushed off to, you know, folks we knew just cause of obviously concerns or conflicts. Um, and everyone had the same story to tell. And sort of to your point of, of how this happened, um, everyone had the same story to tell about, um, you know, being recruited. Uh, typically the physicians were recruited, uh, by a recruiting company to work for, and everyone was working for the same company called Cure Healthcare. And Cure Healthcare had a database called Consults Direct. And, and, and basically the way it worked, and, and this will help lead to the charges that were ultimately charged, but the way it worked was, um, that, that these physicians would get recruited, and it was physicians, in my experience across all spectrums of specialty areas, different stages of their careers. You know, there were folks that we represented that were retired, there were folks that we represented that were brand new and included nurse practitioners, uh, you know, primary care physicians, cardiologists, you know, sort of didn't matter mm-hmm.<affirmative>. And they would get recruited and, and basically offered an opportunity to listen to a recording. And they would get paid$25 per recording, um, regardless of whether they ordered braces or not. And, and typically the way it would work is they'd, they'd go onto this, this website, they'd listen to the recording. The recording was someone from one of the, from a marketing company, um, talking to Medicare beneficiaries, talking to them about their need for braces and then requesting an, an order for the braces. And, and so what was happening is as physicians were going on, and, and, you know, most, if not all the folks that, that we represented, um, you know, when they had concerns, they, they would push back on, on this cure healthcare and, and this particular database consults direct and be reassured, um, mm-hmm.<affirmative> in terms of, uh, the, the legality of what was occurring. They would be reassured, um, any time they asked about it, they would be reassured in terms of, you know, the, the, the use of telemedicine for this. And in addition to that, they were told also, they were directed to make sure that they were putting all of their records, uh, from their review of these particular, of each and every single Medicare beneficiary request for braces in the consults direct database. Um, and, and as you can imagine, what ultimately happens, right, is, is, uh, the government, which continues to get more sophisticated in terms of understanding these different types of, of, of healthcare fraud issues out there, see anomalies in the data, they see a significant uptick in the number of braces and ultimately reach out to many of these physicians that had ordered braces or signed off on orders and asked to see records. And lo and behold, as the physicians go to check for records, they find that the database has disappeared overnight. So, I'm sorry, I'll pause there. I think you probably had a question. Yeah, no, I, I, so I just wanted to kind of recap for our listeners. It sounds like you've got the telemedicine company, which is really kind of working as a recruiter, or HI, has hired a recruiter, they reach out mm-hmm.<affirmative>, they find these physicians, the, you know, as you say, there's sort of, you know, uh, you know, no kind of clear criteria about who was, you know, a physician that was selected new to practice, you know, retired from practice, nurse practitioner, all different types of specialties. And there's something that is incentivizing the physicians to agree to perform this review of the medical records. And, uh, it, it sounds like they were paid a, you know, sort of a, a per review fee, uh, in exchange. Is it, is that right? That That's right. And, and, and many of these folks also denied the request for braces. And, and what you would see happen is over time, as, as the denials increased, the number of recordings decreased. Right? And, and it, and most of these folks did this for a very short period of time, but, um, it was just su it was really surprising to see just the, the, the pure volume and number of, of, you know, very bright, highly educated physicians who got pulled into this. Um, and, and, you know, didn't sort of, you know, hindsight being 20 20 20, you wish they would've asked a health lawyer, Hey, is this okay? Is this something we can do? Cause they were getting reassured, but they weren't getting reassurance from the right people. Right. No, absolutely. And, and, you know, I think my, you know, my next question is, and, and maybe it's a twist on what I was just asking, but, you know, why was it so easy for the physicians to be pulled into the scheme? You know, what was it about this that made them so inclined to say, yes, sure, I'll do this. You know, I'd really be guessing on some of that, but I, but I think sort of from, from, again, just my experience being involved in, in so many different pieces of this case, um, I, I, I think it was a few things. I think number one, folks believed that telemedicine was, you know, this version of telemedicine was okay. Um, you know, many folks were, were looking to make a little extra money and were being reassured that it was an appropriate way to do it, and viewed it as an opportunity to work part-time. You know, they'd have their full-time job, and then most of them would do this for a few hours here and there during the week, and, and listen, listen to these different recordings. Um, but it was really, it was really an interesting, you know, interesting to see as a former prosecutor now that on the defense side for so long, um, just how, how these, these folks that were running this particular enterprise were able to do these physicians believing that this was okay. And, and ultimately when they go to collect the records, um, and everyone very, being very eager to provide the records to the U or to CMS when they're requested, can't get access to that. Um, and, and what was interesting about it, you really had two issues, right? You had, number one, that this version of telemedicine is inappropriate. You have to have a face-to-face encounter during a synchronous video teleconference. So you're missing that component of it. And then you're also missing not being able to produce the records. And even though it wasn't their fault, even though they couldn't produce the records, because this company literally disappeared overnight. Um, and there were many attempts made by us and many other attorneys out there representing these physicians to get access to these records. We weren't able to, and there was no exception to that. Um, in terms of their issues with CMS and being ultimately excluded, uh, to, to a physician, they had to deal with fighting and exclusion. So it really became kind of a, just an amazing thing to watch, you know, as someone participating and defending these physicians. Um, and just how, how challenging it became to fight the exclusion. And, you know, you're dealing with reconsideration requests and appeals and having to work your way up towards the dab. Um, you know, it, it was quite a challenge. It sounds like this turned, uh, quickly for these physicians from an opportunity to, you know, perhaps earn, you know, some extra money to, uh, you know, almost facing the death now of, uh, you know, a health healthcare career in the form of exclusion from programs. Uh, what were your clients' reactions to that? What kinds of consequences were they facing and how did you, uh, how did you counsel them through that? Well, certainly devastated, I mean, would be the word that comes to mind of how they felt about it. Um, you know, to to, to your point, right? These folks are, they're highly trained, they're highly educated. They're, they're trying to make a little extra money thinking it's okay. And, and going through this and, um, finding out that for the, you know, for some of them, write a very small amount of money, you know, 5,000, 8,000,$9,000 over six months, and discovering that not only, uh, you know, might they lose, might they, might, they face revocation, they're gonna lose their career potentially over this, it is a death blow. And just trying to get them to recognize that the process is, it's not easy. Um, you know, it is an uphill fight and you have to realize it's a marathon. It's not gonna happen quickly. And I think that was the, the, the hardest thing for clients to really appreciate and, and was also just to realize like, wow, you know, you know, this, this really was something that, uh, if I could go back in time, I never would be involved in. Um, and it gets to that point I raised earlier, you know, you have that moment when you're, when you're dealing with clients in that situation where you just think to yourself, gosh, you know, I wish they would've spent, you know, a little bit of money to get some legal advice from a really true healthcare lawyer who really understands this world. And it would've saved them an awful lot of pain on the back end. And, um, you know, we were, we were fortunate, I have to say that, that as difficult as it was, and it can be to deal with, you know, large agencies and, you know, and CMS in particular in this instant to, to CMSs credit, uh, it it, what it ended up doing was it ended up creating, uh, a compliance program or a compliance initiative. I think because there were so many physicians, and again, this is in the middle of a pandemic who were dealing with revocation, many of them losing their jobs. And as, as the revocation was pending, and we were fighting it, and, and they developed this compliance initiative. And it was very interesting also because there was no insight into the initiative. You know, there, there's nothing listed about it. There's nothing that they would share about it in terms of criteria or who, who could be accepted, who couldn't. But to their credit, they did create this mechanism that allowed many of these physicians to ultimately, you know, work through compliance issues, to, to sort of pledge future compliance and the steps that they would take to be compliant going forward that allowed them to ultimately avoid a 10 year, you know, revocation with a1 year re-enrollment bar. So, you know, a lot of pain, a lot of time, uh, expense, but ultimately, uh, most if not all of those, uh, of the, of the clients that we represented got through this. But it wasn't easy. That's interesting that, uh, the agency, uh, approach of developing a compliance initiative, frankly, I think that's a, you know, it's a, a positive sign. And I, of course, I think, you know, the listeners would certainly, uh, enjoy hearing more about what the, uh, initiative involves, but it sounds as if, uh, there's not much insight at all. Rather, it's somewhat of a, a black box of a, you know, kind of a rehabilitation program almost, uh, uh, for<laugh>. I think that's the right way to describe it.<laugh>, you know, man, it is, it it real and it really is a black box. Um, and, and you know, it, it's, it's easy to sort of want to be critical of it, right? Because you wanna understand it better and understand the criteria and who can get accepted and who cannot. But at the same time, you know, I was very grateful, uh, ultimately, yeah. Cause anyone who's ever fought a revocation and knows when you get into that process, it, it's like fighting with two hands tied behind your back. Um, and the standards are, are, you know, very challenging and, uh, especially at the dab level. So, you know, from our perspective, when, when this, you know, was created and, and started to be offered to certain clients, uh, you know, we jumped on it, as you can imagine. And, and it's worked out really well. That's great. And really, it's evolved, essentially pledging compliance going forward, you know, sort of recognizing like, oops, you know, this, this, this work, this type of telemedicine work w was not compliant ultimately with CM s regulations. And, and, you know, going forward, you know, agreeing not to do certain things in the telemedicine world, and also ensuring that your employment contracts have language in it, that that allows you, or at least there's an agreement that you'll be able to access records. Because that was really the triggering event when it came down to, was the inability of folks to produce records, even though, um, they were not the ones maintaining the database. Right. So it was really a, it was either you had'em or you didn't, and that was it. Right, right. No, and it sounds like you're touching on something, you know, sort of broader John, which is kind of lessons learned. And, you know, I think, um, you know, kind of switching gears, uh, just given your experience here, the, you know, benefit that your clients have received from the CMS compliance initiative, and then, you know, kind of thinking about the changing landscape of telemedicine, we talked at the start of this, uh, uh, uh, uh, discussion about a billing, uh, uh, issue versus use of telemedicine as a fraud, uh, tool. Uh, but given covid and given some of the, you know, coverage, uh, permissions and CMS is offered during this public health emergency, I just think that we're gonna see more and more issues when it comes to telehealth and tele fraud, whether they're, uh, intentional or unintentional. And from that place, I, I think it's important to understand what, you know, what are the warning signs? What should we be on the lookout for? Uh, what are some of the lessons learned that providers and, and health systems can take away from your experience, John? Sure. I, I mean, I think one of the most important to me was, was, was just the basic understanding of how telemedicine works. You, you know, I, I think it's easy for some of the regulatory agencies to sit back and say, well, you should know this. Um, and the truth is not everyone does. Um, telemedicine's constantly evolving. The rules around it are constantly changing. We certainly saw that throughout the pandemic, right? And, and, and sort of coming out of the pandemic of what that's gonna look like and to just assume, I'll give, for example, a 70 year old retired physician's gonna understand how telemedicine works and what's, what's compliant and what isn't. I think that's naive. Um, so, so I do think that, that there has to be a focus for physicians. It's certainly in health systems, a a real understanding of how, how telemedicine works. And also, quite frankly, if I'm a health system and I've got all these employed physicians, I'd wanna make sure that they understand through, through training, hey, that there are these, there are these kind of opportunities out there that you may get approached about. And I know that physicians get approached constantly for these kind of, you know, what I would call side jobs and the risk that is associated with them and the, and the need that they, they really need to go and get legal advice before they engage in any type of side job. And, and, and quite frankly, you know, it's the old, uh, like we learn in kindergarten, if it's too good to be true, it's probably too good to be true. Um, and, and so from my perspective, I think that's where the risks lie. I think it's, you know, making sure that folks know, making sure that they understand that there's a lot of risk out there in these, in these side jobs of moonlighting opportunities and making sure that they're getting good advice from people who actually understand the industry and understand healthcare. Um, you know, to me, I think that's really the key, John. Very well said. And, uh, you know, it sounds to me that, uh, you know, the other expression is, uh, uh, an ounce of prevention is worth a pound of cure. And, uh, and so, you know, I think there's a lot of lessons learned here and, you know, really good signals that you've, you've sent today, John, and, and, uh, you know, before we close out here, let me ask anything that we've missed, anything you wanna share with the audience, any final thoughts? No, I, I, look, I just really appreciate the opportunity, of course, uh, Matt, Matt, to speak with you and speak with folks at the A H L A and our members. And, and hopefully, you know, if this helps, uh, one member, you know, help us physician through this been great. Um, you know, I, I think, uh, uh, you, you know, we always have a lot of work to do when it comes to, to fighting healthcare fraud and abuse and making sure our com our clients are acting in a compliant manner, right. Making sure they're educated and well inform. Absolutely. Well, bass Barry and Sims, John Kelly, thank you, sir. Great insights and really appreciate the time. As always, we'd love to have you back on the podcast soon. Great. Thanks, Matt. Take care. I appreciate it. Thanks everybody. A absolutely. And thank you also to our podcast sponsor, the Berkeley Research Group, and to our listeners, if you enjoyed this episode of the American Association Podcast, please subscribe, download, show you your podcast next episode. Thank you.