3 Red Flags That Could Indicate Telehealth Fraud, Waste and Abuse

November 17, 2020

As the COVID-19 pandemic sent the nation into lockdown, telehealth emerged as a means of providing access to care while maintaining social distancing. Now, many months into the crisis, telehealth continues to gain traction, with the medical professional networking site Doximity estimating that more than 20% of all medical visits in 2020 will be conducted virtually.  

Though not a new medium in itself, telehealth has historically been slow to take hold; that is, until a pandemic forced a rapid evolution of technology and policy to support its widespread use. Naturally, this has created an environment rife with uncertainty — and ripe for fraud, waste and abuse.

Despite — or, perhaps, because of — its newness, we are beginning to identify some common telehealth fraud schemes emerging from the public health emergency (PHE). Here, we’re highlighting some of the major red flags special investigation units (SIUs) should look for amid this new era of telehealth, along with strategies to fraud-proof your operations for the future.

Red Flag #1: Business As (Or Better Than) Usual During the PHE

During the initial height of the pandemic, many providers experienced a significant drop in revenue as elective procedures were postponed and patients put off necessary care. Although recent projections indicate the impact may not be quite as dire as earlier estimates, many hospitals and health systems are still in financial crisis.

In an attempt to make up for lost revenue, unscrupulous providers may be incentivized to bill for virtual care services that were not in fact rendered — whether via telehealth or at all. In recent telehealth investigations conducted by our SIU, HMS found providers who continued to bill at similar or same rates as prior to the PHE. In some cases, providers billed twice a week for telehealth services — without documentation — for patients who had not actually been seen. Consecutive days of telehealth visits, implausibly high-volume telehealth days and uninterrupted demand for services through the PHE may be indicators of a potential fraud scheme. 

Red Flag # 2: Blanket or Otherwise Suspect Billing Patterns (Context Is Key)

Blanket billing, or a pattern of billing the same service codes for many or all patients, could be a red flag for telehealth fraud or abuse, particularly during the PHE. Blanket billing is a scheme whereby a provider may bill the same service combinations and even diagnosis codes across all clients. This can be an indicator of services not rendered and has been observed in telehealth billing schemes. It is important to consult with clinical experts in performing your investigations to gain insights as to whether it is possible for all patients to have the same diagnoses or receive the exact same level and type of treatment. Look for cut-and-paste-type billing patterns that appear suspect or simply do not make clinical sense.

Red Flag #3: Unusual Ordering Trends — Prescription Drugs, Laboratory Testing & Durable Medical Equipment (DME)

Long before the pandemic, healthcare fraud schemes involving clinical testing laboratories, DME companies and telehealth providers were increasingly making headlines. It is perhaps unsurprising, yet nonetheless disturbing, that we continue to see these types of ordering and referring schemes during the COVID-19 crisis. In one recent example, the Department of Justice charged 86 people in a $4.5 billion telemedicine scheme. According to Becker’s Hospital Review, telemedicine executives were allegedly paying clinicians for laboratory testing, pain medication and DME, despite there being little to no interaction with patients.

Common ordering and referral schemes include compound drugs, lotions and ointments, unnecessary DME/supplies and laboratory services. When it comes to DME in particular, the following are a few key metrics to look for in your data:

  • Telemedicine orders for unnecessary or unwanted equipment or supplies.
  • The ratio of orders between the healthcare provider and DME supplier (e.g., all of a provider’s DME orders are being sent to one supplier).
  • A spike in ordering for certain DME suppliers.
  • Trends indicating a provider is an outlier compared to peers.

What Can Health Plans Do?

As we continue to monitor new and ongoing telehealth schemes, there are actions SIUs can be taking today to combat fraud, waste and abuse, while preparing for a more virtual tomorrow. These include:

  • Optimizing your data visualization techniques to make accurate peer comparisons and identify unusual trends and outliers.
  • Adjusting your sampling methodology based on new telehealth considerations — e.g., collecting data based on modifier 95, rather than place of service.
  • Conducting thorough research, including background research on providers and other relevant parties well as focused interviews with patients to learn about their experiences firsthand.
  • Consulting with data scientists and clinical experts to analyze your data in the appropriate context.
  • Requesting telehealth-specific items in medical records request letters to verify critical information, such as proof of identity and notation of consent.

For more fraud investigation and mitigation strategies for the new age of telehealth, see our previous blog, Fraud-Proof Your Telehealth Strategy for the New Healthcare Normal. To learn how HMS is supporting SIUs in combatting healthcare fraud, waste and abuse, view our Fraud Solutions video, and visit HMS.com to browse our full suite of payment integrity solutions.

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