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Continued Focus on Telemedicine

During the second quarter of 2019, DOJ continued its focus on enforcement activity in telemedicine. As reported in prior editions of the Quarterly Roundup, telemedicine is an expanding field, causing DOJ to pay particular attention to the industry.

In April 2019, DOJ indicted the owner and operator of 1stCare MD and ProfitsCentric with one count of conspiracy to pay and receive kickbacks.[1] The defendant’s arrest and federal indictment is part of a nationwide law enforcement action, as reported in the Q1 2019 Quarterly Roundup, that targeted 24 defendants involved in alleged extensive healthcare fraud schemes focused on telemedicine and durable medical equipment (DME) marketing. These schemes allegedly resulted in losses amounting to more than $1.2 billion. The indictment alleges that from 2016 to 2019 the defendant defrauded HHS in its administration and oversight of Medicare by conspiring with others by paying and receiving kickbacks and bribes in exchange for doctors’ orders for DME for Medicare beneficiaries. Prosecutors also alleged that the defendants, 1stCare MD and ProfitsCentric, through their network of doctors, generated thousands of doctors’ orders for DME absent a pre-existing doctor-patient relationship and a physical examination, and that the orders were based solely on a short telephone conversation. The indictment alleges that these activities resulted in the submission of approximately $40 million in fraudulent Medicare claims for DME.

Further, in July 2019, DOJ indicted a New York-based anesthesiologist for her alleged role in a $7 million telemedicine conspiracy to fraudulently bill Medicare, Medicare Part D plans and private insurance plans, resulting in more than $3 million in payments on those claims.[2] According to DOJ, the indictment resulted from investigative work by the Criminal Division’s Medicare Fraud Strike Force, a joint initiative of DOJ and HHS. Eastern District of New York prosecutors charged the anesthesiologist with one count of conspiring to commit healthcare fraud by misusing telemedicine channels under agreements with unidentified companies to prescribe DME and drugs to more than 3,000 Medicare beneficiaries. The indictment alleges that, from January 2015 to May 2018, the anesthesiologist and other providers allegedly received kickback payments from unidentified companies for improper telemedicine encounters. The indictment alleges that the anesthesiologist “prescribed and ordered DME and prescription drugs for beneficiaries who were not examined or evaluated by a licensed physician.” The prosecutors alleged that the prescriptions flowing from the alleged telemedicine encounters were for DME and drugs that were neither medically necessary nor the result of genuine physician-patient relationships.

PRACTICE NOTE: Given DOJ’s recent criminal enforcement related to telemedicine, telemedicine companies should closely review their compliance with the federal and state laws that may be implicated through a telemedicine practice. Further, DOJ’s focus on individual accountability is particularly important with respect to telemedicine, given its interest in pursuing criminal actions against physicians.

[50] See Press Release, US Dep’t of Justice, Owner of Guadalupe County Telemedicine Companies Arrested in National Health Care Fraud Takedown (July, 9 2019), https://www.justice.gov/usao-wdtx/pr/owner-guadalupe-county-telemedicine-companies-arrested-national-health-care-fraud.
[51] See Press Release, US Dep’t of Justice, New York Anesthesiologist Indicted for Alleged Role in Telemedicine Health Care Fraud Conspiracy (July, 9 2019), https://www.justice.gov/opa/pr/new-york-anesthesiologist-indicted-alleged-role-telemedicine-health-care-fraud-conspiracy.

© 2019 McDermott Will & Emery

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David Quinn Gacioch, White Collar Criminal Defense Attorney, McDermott Law Firm
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David Quinn Gacioch is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm's Boston office. He focuses his practice in the areas of white-collar criminal defense and government investigations. Dave also has significant experience in product liability defense, general commercial litigation/arbitration, and appeals.

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Tony Maida Health Care Attorney McDermott WIll Law Firm
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Tony Maida is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s New York office.  Tony has extensive experience in health care fraud and abuse and compliance issues, including the federal Anti-Kickback and Physician Self-Referral/Stark laws, false claims and overpayments, and government investigations.    He works closely with our health and white collar teams on criminal, civil, and administrative investigations and counseling clients on corporate transactions and compliance programs.

Tony previously served as a senior official in the Office of Counsel to the Inspector General at the United States Department of Health and Human Services, where he worked for nine years.  As Deputy Chief of the Administrative and Civil Remedies Branch, Tony led a team of attorneys representing the agency on False Claims Act and Civil Monetary Penalty Law cases, including conducting investigations and negotiating settlements and Corporate Integrity Agreements in some of the largest settlements obtained by the United States.  He participated in defending the OIG in numerous exclusion appeals, including appeals pursued by high-level corporate executives.  

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Laura McLane is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Boston office.  Laura represents clients in securities, healthcare and other government enforcement matters, both civil and criminal. She also represents clients in professional liability cases, products liability cases and complex commercial disputes, and she routinely conducts internal investigations for clients.

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Amandeep S. Sidhu is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C., office.  He focuses his practice on complex commercial disputes, health care related investigations and litigation, government strategies and regulated industries.  Aman serves on the Firm’s Diversity/Inclusion Committee and Pro Bono and Community Service Committee.  Selected as a 2013 Rising Star in Civil Litigation Defense by Super Lawyers, Aman was also named to the National Law Journal's “Minority Top 40 Under 40” in 2011 for his...

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Paul M. Thompson is a partner in the law firm of McDermott Will & Emery LLP and serves as the Partner-in-Charge of the Firm’s Washington, D.C., office.  Paul focuses his practice on white-collar criminal defense, congressional investigations and appellate matters.  Paul has been repeatedly recognized by the National Law Journal in its Appellate Hot List.  He was named as a “Star” in Benchmark Litigation 2015 for his work on white-collar matters and appeals. 

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