On May 26, 2021, the Department of Justice (“DOJ”) announced a coordinated law enforcement action against 14 telehealth executives, physicians, marketers, and healthcare business owners for their alleged fraudulent COVID-19 related Medicare claims resulting in over $143 million in false billing.[1] This coordinated effort highlights the increased scrutiny telehealth providers are facing as rapid expansion efforts due to COVID-19 shape industry standards.

Since the outset of the COVID-19 pandemic, the DOJ has prioritized identifying and prosecuting COVID-19 related fraudulent conduct, particularly in regards to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act[2] financial assistance programs. However, before this latest health care fraud takedown, the DOJ announced relatively little enforcement activity specific to federal healthcare programs. This renewed enforcement action may spark an increased effort by the DOJ to manage pandemic-related fraud as it relates to healthcare programs.

In addition to the DOJ criminal charges, the Center for Program Integrity (“CPI”), Centers of Medicare and Medicaid (“CMS”) separately announced penalties for over 50 medical providers for their involvement in health care fraud schemes related to the pandemic and abuse of CMS programs.[3] The CPI/CMS charges in conjunction with DOJ’s healthcare fraud takedown provide insight into DOJ’s current enforcement patterns related to the pandemic which include:

• Telehealth Waivers: In an effort to expand patient access during the pandemic, CMS broadened the services it reimbursed for telemedicine practices while federal officials also relaxed privacy guidelines that restricted types of devices that qualified to administer telehealth services. CMS also waived patient deductibles and copayments, which otherwise would have been construed as kickbacks if used for unnecessary services. The cases announced by both the DOJ and CMS allegedly sought to exploit these expanded policies by submitting false claims to Medicare for telemedicine encounters that never actually occurred. Additionally, DOJ charged medical professionals in these cases with allegedly accepting bribes in exchange for referrals of medically unnecessary testing.[4]

• Bundled COVID-19 Testing: In addition to filing medically unnecessary Medicare claims, the DOJ charged defendants in these cases with bundling COVID-19 testing claims with Medicare claims for additional, often more expensive laboratory tests, such as cancer genetic testing, allergy screenings, and respiratory pathogen panel tests. In many of these cases, these tests were medically unnecessary or were not even provided to the patients.[5]

• Provider Relief Funds: The recent law enforcement activity included the third criminal case in the country targeting misuse of Provider Relief Funds. The CARES Act created this funding to support patients with healthcare related expenses or lost revenue attributable to COVID-19. In this case, the DOJ alleged that the owner of a home health agency misappropriated Provider Relief Funds for his own benefit.[6]

While the DOJ’s May announcement focused on criminal healthcare fraud actions related to COVID-19, we can expect that the DOJ’s Civil Division will also make telehealth enforcement a priority. In a February address to the Federal Bar Association’s Qui Tam conference, Acting Assistant Attorney General Brian M. Boynton stated, “I also expect a continued focus on telehealth schemes, particularly given the expansion of telehealth during the pandemic.”[7] It is likely that the expansion of telehealth services and waivers will cause the Department to see a rise in qui tam actions filed by whistleblowers, as well as False Claims Act cases as the year progresses and the economy continues to recover from the pandemic.

[1] Press Release, DOJ Announces Coordinated Law Enforcement Action to Combat Health Care Fraud Related to COVID-19, Department of Justice (May 26, 2021).

[2] The CARES Act, Pub. L. No. 116-136 (2020).

[3] Press Release, DOJ Announces Coordinated Law Enforcement Action to Combat Health Care Fraud Related to COVID-19, Department of Justice (May 26, 2021).

[4] U.S. v. Stein et al., 1:21-CR-20321-CMA (S.D. Fla. May 25, 2021).

[5] U.S. v. Taylor, 2:21-MJ-02003-MEF (W.D. Ark. May 21, 2021); U.S. v. Ruis et al., 9:21-CR-80080 (S.D. Fla. May 24, 2021); U.S. v. Clarkin, 3:21-CR-00438 (D.N.J. May 24, 2021).

[6] U.S. v. Hannesyan, 2:21-MJ-02562 (C.D. Cal. May 24, 2021).

[7] Press Release, Acting Assistant Attorney General Brian M. Boynton Delivers Remarks at the Federal Bar Association Qui Tam Conference, Department of Justice (February 17, 2021).