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.