3 Fraud Schemes Emerging from the Transition to Telehealth

December 2, 2020

The rapid shift to telehealth — driven largely by an unprecedented health crisis — has created an almost perfect storm for fraud, waste and abuse. With the economy reeling and the healthcare system under extreme stress, providers may be more prone to coding and billing inaccuracies — and healthcare organizations more vulnerable to improper payments.

Although these errors can be both intentional and unintentional in nature, the unfortunate reality is that unscrupulous providers and other fraudsters are capitalizing on the COVID-19 crisis. Here are some of the most common schemes we’re seeing emerge from the pandemic as well as tips to help special investigation units (SIUs) navigate the new normal.

  1. Billing Non-Telehealth Visits, Including Virtual Check-Ins & E-Visits, as Telehealth

During the public health emergency (PHE), the Centers for Medicare & Medicaid Services (CMS) granted a number of payment flexibilities in order to facilitate access to telehealth. Among the changes, Medicare will reimburse telehealth visits at the same rate as if the services were rendered in person. Providers may therefore be incentivized to bill for telehealth visits when, in fact, only a virtual check-in (a brief communication technology-based service) or e-visit (a non-face-to-face interaction, generally occurring via online patient portal) took place. If an interaction was billed as telehealth, it is important to validate that all minimum requirements for a telehealth visit were met, including the use of interactive audio-visual modalities (if audio and video were both required for the service billed).

Investigation Tip: Using data visualization tools, look for patterns that could indicate suspect billing trends, such as consecutive days of telehealth services, a high volume of telehealth utilization during a known low-demand period and blanket billing patterns.

  1. Telemarketing Schemes

Throughout the pandemic, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) has warned of potential scams targeting Medicare beneficiaries with “unapproved and illegitimate” services. According to the OIG website, “fraudsters are targeting beneficiaries in a number of ways, including telemarketing calls, text messages, social media platforms, and door-to-door visits.” With telehealth, providers have much broader reach and, through illicit solicitation practices, can obtain information for thousands of patients.

In August 2020, around the time telehealth use had been skyrocketing due to the pandemic, insurance giant Humana sued the telemedicine company QuivvyTech for allegedly cold calling patients and conspiring with providers to issue fraudulent prescriptions for medications, including high-cost topical creams and ointments. The timing of the suit underscores one of the major risks associated with telehealth. It is also an example of how these risks have been exacerbated as demand has grown, reimbursement rates have increased and regulations governing telehealth have been suspended or relaxed.

Investigation Tip: Conduct patient interviews and/or surveys to gain insight based on first-hand experience, such as whether they requested the DME or drug they received and, if not, who contacted them and how.

  1. Ordering & Referring Schemes

As with the QuivvyTech lawsuit, telemarketing scams often go hand in hand with ordering and referring schemes, which had been on the rise prior to the pandemic. These types of schemes often involve orders for unnecessary or unwanted compound drugs, durable medical equipment (DME) and laboratory supplies for patients with whom the ordering provider had no interaction.

Some of the largest healthcare fraud schemes in U.S. history have involved telemedicine providers and DME companies. One of the largest and most recent schemes to make headlines — resulting in more than $6 billion in alleged fraudulent claims — involved telemedicine executives paying providers to order unnecessary medical equipment, testing or drugs, according to Healthcare Dive

Investigation Tip: In addition to qualitative interviews with patients, look for unusual spikes in reporting; for example, a high ratio of orders between a particular provider and DME supplier.

For more red flags and mitigation strategies to combat fraud and abuse amid the new era of telehealth, see our previous blogs, 3 Red Flags That Could Indicate Telehealth Fraud, Waste & Abuse and Fraud-Proof Your Telehealth Strategy for the New Healthcare Normal.  


To learn more about HMS’ FraudCapture solution and other payment integrity offerings for SIUs, schedule a conversation. 

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