HHS OIG examines telehealth fraud in Medicare during the pandemic

The COVID-19 public health emergency led to an overwhelming increase in the utilization of telehealth services and CMS took a number of actions to temporarily expand access to telehealth for Medicare beneficiaries, raising concerns over the potential for fraudulent billing. In July 2022, the HHS Office of Inspector General (OIG) released a special fraud alert that encouraged "heightened scrutiny" when engaging with telemedicine companies that demonstrated "suspect" characteristics. The same month, the US Department of Justice announced a nationwide coordinated law enforcement action that included telemedicine-related charges accounting for more than US$1 billion of the total alleged intended losses. Building on these actions, the OIG recently released two reports examining providers' billing for telehealth services and the characteristics of Medicare beneficiaries who used telehealth services during the first year of the pandemic. The reports focused on Medicare fee-for-service claims data and Medicare Advantage encounters data from March 2020 through February 2021.

In the first report, Medicare Telehealth Services During the First Year of the Pandemic: Program Integrity Risks, the OIG reviewed the claims from the 742,000 providers who billed for a telehealth service in the first year of the pandemic and found that two in five Medicare beneficiaries used telehealth—an increase of 88 times more telehealth services than used in the year prior to the pandemic. To determine which providers posed a high risk to Medicare, the OIG developed seven measures that focus on different types of billing that providers may use to inappropriately maximize their Medicare payments:

• Billing both a telehealth service and a facility fee for most visits
• Billing telehealth services at the highest, most expensive level every time
• Billing telehealth services for a high number of days in a year
• Billing both Medicare fee-for-service and a Medicare Advantage plan for the same service for a high proportion of services
• Billing a high average number of hours of telehealth services per visit
• Billing telehealth services for a high number of beneficiaries and
• Billing for a telehealth service and ordering medical equipment for a high proportion of beneficiaries

From these measures, the OIG claims it "set very high thresholds to identify providers who[se] billing pose[d] a high risk to Medicare," and it ultimately found that 1,714 providers posed a high risk to Medicare during the first year of the pandemic. These providers received US$127.7 million in Medicare for fee-for-service payments and had concerned billing in one of the OIG's seven developed measures. The OIG also found that 991 of the 1,714 providers that posed a high risk were in the same medical practice as at least one other provider who was identified as a high-risk provider.

In response to its findings, the OIG recommended that CMS increase its oversight of telehealth services; provide additional education to providers on how to bill for telehealth services properly; and follow up with the providers identified by the OIG as high-risk it its report. While CMS concurred with the OIG's recommendation to follow up on the high risk providers, the agency "did not explicitly indicate" whether it concurred with the OIG's other recommendations.

In a second report, Certain Medicare Beneficiaries, Such as Urban and Hispanic Beneficiaries, Were More Likely Than Others to Use Telehealth During the First Year of the COVID-19 Pandemic, the OIG examined the characteristics of Medicare beneficiaries that used telehealth services during the first year of the pandemic. The OIG found that urban area beneficiaries rather than rural area beneficiaries used telehealth more during the first year of the pandemic and dually eligible beneficiaries (those eligible for Medicare and Medicaid), women, Hispanic and younger beneficiaries were more likely to use telehealth than others. Telehealth users were also far more likely to use these services from home or other non-healthcare-related settings than in a healthcare facility.

Congress extended, via The Consolidated Appropriations Act, 2022, the telehealth flexibilities introduced in the pandemic for the Medicare program until 151 days following the expiration of the public health emergency. And the House of Representatives passed the Advancing Telehealth Beyond COVID-19 Act, which would extend the flexibilities in Medicare through 2024 if also passed by the Senate. Uncertainty remains about whether the flexibilities will become permanent and some members of Congress have expressed concern about the potential for fraud and abuse as a reason to proceed with caution.

Special thanks to Senior Health Care Analyst Kathleen P. Rubinstein (Houston) for her assistance in the preparation of this content.