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DOJ Increases Scrutiny on Telemedicine Entities

Telemedicine permits two-way, real time interactive communication between health professionals and patients. Its recent expansion has dramatically improved patient health by providing new access to health care for rural Americans and by providing a cost-efficient alternative to traditional face-to-face medical care for common ailments. The DOJ’s recent focus on targeting telemedicine companies involved in fraud should concern lawful executives and physicians involved in the practice that may be caught up in costly investigations, civil asset forfeiture and potentially devastating criminal indictments.

In April, the DOJ announced charges against 24 telemedicine and durable medical equipment (“DME”) company executives and physicians for alleged fraud totaling $1.2 billion. The crackdown spanned across the country, with federal law enforcement executing over 80 search warrants in 17 federal districts. The scheme involved the payment of illegal kickbacks and bribes by DME companies in exchange for Medicare patients by physicians working for telemedicine companies, prescribing medically unnecessary back, wrist, shoulder and knee braces. Employees at call centers would reach out to elderly patients offering free or low-cost medical equipment without regard for medical necessity. The call centers then paid kickbacks and bribes to telemedicine companies who then paid physicians to prescribe equipment without sufficient patient interaction before selling the orders to DME companies who fraudulently billed Medicare.

Several of the prosecutions also involved forfeiture of assets associated with the offenses. Civil asset forfeiture has come under scrutiny because it only requires the government have probable cause that assets and property are connected to criminal activity before seizure, a lower standard of proof than the beyond the reasonable doubt standard for actually convicting someone of a crime. Civil forfeiture may even precede an indictment or notice of investigation, making assets inaccessible for long periods of time, leaving individuals and businesses significantly crippled or entirely unable to operate.

The April action is just the latest example of the DOJ’s increased focused on telemedicine. Similar fraud investigations were announced late last year against telemedicine companies, company executives and physicians. In light of this recent trend, industry participants should exercise caution consulting with regulatory experts to ensure robust compliance programs are in place, particularly in light of the DOJ’s recent re-emphasis on exercising significant discretion in rewarding companies with strong compliance programs during investigations.

© Polsinelli PC, Polsinelli LLP in California

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About this Author

Brian F. McEvoy, Polsinelli PC, Atlanta, white collar criminal defense lawyer, health care fraud matters attorney
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Brian McEvoy is an accomplished litigator with a well-earned reputation for working tirelessly to achieve the best outcomes for clients and for thinking creatively and strategically to resolve difficult problems with efficiency and professionalism. Brian is a former federal prosecutor with a practice focus on white collar criminal defense and a special emphasis in health care fraud matters. During his service as a federal prosecutor, he received special commendation from the Department of Health and Human Services by receiving the Inspector General's Integrity Award for...

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As a shareholder in the Government Investigations practice, Brian Rafferty leverages a distinguished background serving as Chief of the Criminal Division of the United States Attorney’s Office for the Southern District of Georgia. In his more than ten years of experience as a federal prosecutor, Brian oversaw and managed some of the most high-profile and complex investigations in the Southern District of Georgia. Before his work as a federal prosecutor, Brian was a partner at white collar criminal litigation boutique in New York, where he represented individuals in government investigations.  Brian draws upon his deep understanding of the inner workings of enforcement authorities to represent clients facing regulatory and criminal enforcement actions. Leveraging his extensive experience and sound judgment, Brian constructs comprehensive strategies to defend entities and individuals facing government investigations and enforcement proceedings.

Brian focuses his practice on defending clients in a multitude of white collar defense, internal investigations and complex federal litigation matters. He provides prospective guidance to mitigate and ensure compliance with applicable state and federal laws and regulations. His work spans an array of industries with a particular focus on health care fraud, government contracting, and financial industries.

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Michael M. Besser, Associate, Polsinelli, Government Investigations, False Claims Act Defense, internal investigation matters
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As a member of Polsinelli's Government Investigations practice, Michael Besser helps clients mitigate risk and resolve collateral consequences in a practical and efficient way, while minimizing impact on their business and reputation. He assists seasoned Polsinelli attorneys with the representation of individuals, organizations, and corporations in all aspects of white collar defense and internal investigations, from discovery through sentencing, including factual and legal research and motion practice. Michael also focuses his practice on False Claims Act Defense and...

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