October 16, 2021

Volume XI, Number 289

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Virulent Fraud: Abusing COVID-19 Relaxed Telehealth Rules for Medicare Fraud

Florida-based fraudsters saw COVID-19 pandemic-related changes in Medicare telehealth rules as opportunities to bill the government for unnecessary genetic testing.  A laboratory owner pled guilty to kickback charges in a $73 million conspiracy to defraud Medicare.

According to the court records, the fraud scheme entailed the laboratory owner conspiring with a telemedicine company owner to funnel genetic testing orders to the laboratory.  Because of the pandemic, temporary amendments to telehealth restrictions allowed “telehealth providers access to Medicare beneficiaries for whom they could bill consultations.”  The laboratory owner paid kickbacks to the telemedicine company owner for “expensive and medically unnecessary cancer and cardiovascular genetic testing.”  Moreover, the two companies obscured the payments for testing orders in an “IT and consultation services” contract.  The lab owner potentially faces 15 years in prison for this scheme.  Unfortunately, it doesn’t appear that an insider reported the fraud or filed a False Claims Act case.  A whistleblower who reported the fraud would have been entitled to 15-25% of the government’s recovery of a civil settlement.

Medicare’s expanded telehealth services during the Public Health Emergency was intended to improve access to care when travel to a provider’s office is prohibitively risky.  Fraudulent manipulation of telehealth services denigrates their value for the homebound ill population who would benefit from this technology.

The Department of Justice needs whistleblowers to report Medicare and telehealth fraud. The COVID-19 Fraud Enforcement Task Force specifically targets pandemic-related fraud, as unscrupulous actors seek to take advantage of an already dire situation.

© 2021 by Tycko & Zavareei LLPNational Law Review, Volume XI, Number 259
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About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...

202-973-0900
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