Helping Clients Avoid Telehealth Fraud

Quick look: Legitimate telemedicine solutions provide affordable, convenient care. Unfortunately, telehealth fraud is rampant, with over $128 million worth of risky claims submitted during the first year of the pandemic alone. Here’s how brokers who partner with a PEO can help clients avoid dishonest providers and offer their employees reputable virtual solutions.

Telehealth services have skyrocketed since the pandemic began, and for good reason. Virtually accessing care can help patients experience lower costs, more convenient appointments, and less exposure to infectious illnesses.

The Peterson-KFF HealthSystemTracker analyzed data from March 2019 through August 2021 and found that telehealth usage grew 13% within the first six months of the pandemic (compared to less than 1% before it began). In August 2021, usage rates plateaued at around 8%. This is markedly higher than before the virus struck, even with the return of inpatient care to pre-pandemic levels.

The statistics also show that telehealth services are common across many populations. Men and women and urban and rural patients use the solutions at similar rates. Younger patients, including children and young adults, are more likely to utilize telemedicine than older people.

Another recent survey confirmed that telehealth usage is more than just a trend. Rock Health’s 2021 Digital Health Consumer Adoption Survey revealed that approximately 75% of telemedicine users expect to continue using the services at the same rate or more.

But this rise in popularity didn’t come without some drawbacks. Unfortunately, the number of fraudulent telehealth claims also rose steadily. And while this news may alarm clients who provide or hope to offer telehealth solutions, brokers can help ease the burden by leveraging a professional employer organization (PEO) partnership that provides access to reputable providers.

The rise of telehealth fraud

Telehealth fraud is making headlines, largely due to the alert the Office of Inspector General (OIG)’s special fraud alert released on the matter this year.

According to the statement, employers should be vigilant when entering arrangements with telehealth or telemedicine companies. The OIG reports that some of these organizations intentionally paid medical practitioners commissions to “generate orders or prescriptions for medically unnecessary durable medical equipment, genetic testing, wound care items, or prescription medications resulting in submissions of fraudulent claims to Medicare, Medicaid, and other Federal health care programs.” Multiple organizations were involved in these schemes, including telemarketing call centers, staffing companies, physicians, marketers, brokers, and more.

Additionally, the OIG recently released a study revealing that over 1,700 healthcare providers billed approximately $128 million of high-risk claims to Medicare during the first year of the pandemic alone. The report explains that less than 1% of Medicare-certified healthcare providers submitted nearly half a million of these suspicious claims.

Hundreds of doctors also charged a facility fee while billing for a telehealth visit (this is inappropriate because a doctor who provides telehealth care isn’t permitted to collect a facility fee). Over two dozen providers participated in this double-billing practice more than 1,000 times during the year.

This behavior caught the attention of the Department of Justice, which announced in July that 36 people were charged with over $1 billion in telehealth fraud. Some of those charged belonged to a telemarketing network that convinced thousands of elderly and disabled patients to receive unnecessary genetic testing or medical equipment.

A scheme with harmful consequences

In addition to costing patients extra time and money, telehealth fraud negatively impacts the healthcare system as a whole. The OIG outlines three primary concerns:

• An increase in costs to Federal healthcare programs for medically unnecessary products and services (some of which are never received by a patient)
• Providing beneficiaries with unneeded care, potentially harmful items, or delaying necessary care
• A general corruption of medical decision-making

Potential red flags

How can individuals and employers identify a possible telemedicine fraud scheme? The OIG suggests watching out for the warning signs:

• Potential patients are identified or recruited by a telemedicine company, telemarketing organization, sales agent, recruiter, call center, health fair, or through advertising for free or low out-of-pocket cost products or services.
• The provider doesn’t have adequate contact or information from the patient to accurately assess whether the items or services ordered or prescribed are medically necessary.
• The telemedicine company pays the physician based on the quantities of products or services ordered or prescribed, which may be described to the practitioner as compensation based on the number of alleged medical records they reviewed.
• The telemedicine company only provides items and services to Federal healthcare program beneficiaries and doesn’t accept any other insurance.
• The telemedicine company claims to only offer products and services to those who aren’t Federal healthcare program beneficiaries but may indeed bill those programs.
• The telemedicine company only provides one product or one class of products (e.g., genetic testing, diabetic supplies, etc.), potentially limiting a physician to one predetermined course of treatment.

Steer clients clear of telehealth fraud

Brokers are uniquely equipped to help their clients ensure the legitimacy of their telehealth providers.

By partnering with a PEO, brokers can provide a trusted employee benefits package, including telehealth services, that has been vetted by a seasoned benefits administration and management team.

To further ease clients’ minds, a PEO like ExtensisHR holds all three major industry accreditations (something only 1% of all PEOs achieve):

• IRS Certified PEO (CPEO) Certified
• ESAC accredited
• Certification Institute (CI) Certified for worker’s compensation and risk management

Additionally, ExtensisHR is SOC 1 Type II Certified and has an in-house team of risk and compliance experts to help clients manage a wide range of risks, including workplace safety, state unemployment insurance, workers’ compensation, and more.

Help your clients focus on their futures, not fraud, by providing a comprehensive, vetted benefits package. Contact the experts today to learn more about partnering with ExtensisHR.