Telemedicine consultation. With the advent of social distancing, provider services no longer need to originate in a physician’s office, skilled nursing facility or hospital setting. (Photo: Miriam Doerr Martin Frommherz/Shutterstock)

The novel coronavirus pandemic continues to devastate the nation’s economy, and the healthcare sector is not immune. Hospital emergency departments and intensive care units in hotspot regions are deluged with critically ill patients, while many routine hospital services have been curtailed or suspended so staff and urgently needed supplies can be reserved for treatment of COVID-19 patients.

Elective care has been essentially eliminated. Hospital and outside physician practices — including primary and specialty offices — have also been disrupted. Chiropractic, physical therapy and rehabilitative practices have either closed completely or are barely operational. Non-essential medical practices have closed or are operating with skeleton crews, reduced hours and seeing few patients. These changes are also having an impact on physician compensation.

While medical fraud might not be top of mind as we all try to adjust to new ways of living amid a global health crisis, we know that throughout history, periods of economic uncertainty and financial crisis are the ideal circumstances for widespread fraud. This time is no different.

Telemedicine in full gear

Thanks to our new culture of social distancing, as well as tried and true methods of preventing contagion and slowing disease transmission, the Center for Medicare and Medicare Services, has issued new reimbursement guidelines for telemedicine and telehealth services that are both generous and expansive in terms of allowable benefits to patients.

Under H.R. 6074, the Coronavirus Preparedness and Response Supplemental Appropriations Act 2020, passed in March, in conjunction with the 1136 Waiver, a broad range of healthcare professionals can now provide routine care to patients remotely via video and or audio digital connection.

Allowable services include those provided by:

  • physicians
  • physician assistants
  • nurse practitioners
  • nurse-midwives
  • certified nurse anesthetists
  • psychologists
  • social workers
  • registered dietitians
  • nutrition professionals

Provider services no longer need to originate in a physician’s office, skilled nursing facility or hospital setting. Services can be provided electronically in three levels with specified HCPCS codes for reimbursement. (Previously established in 2019 and restricted largely to rural practices, these codes are now permissible in all areas.)

Three levels of care are permitted under the new regulations:

  1. Telehealth visits
  2. Virtual check-ins
  3. E-Visits

Implications for the rampant growth of fraud

Commercial and private health insurers have similarly expanded the breadth of telemedicine services available to beneficiaries. This kind of remote digital access is allowing patients to access a comparable level of medical service as they usually expect while complying with social distancing and stay-at-home directives.

I have utilized telemedicine services newly available through my private health insurer and found it expedient and easy. However, telemedicine isn’t just about patient convenience; it is allowing private practitioners of all specialties to restore a portion of their revenue streams to practices that have otherwise been dormant.

As legitimate practices and providers are trying to reconfigure their business models, so too are distressed and shady providers. The ease of telemedicine simplifies a scheme previously reliant on physical office space in which they would need to create the appearance of legitimacy while acting unlawfully. The sanctioning of telemedicine creates an opportunity for these fraudsters to rapidly and unscrupulously commit insurance fraud on a scale previously unimaginable for claims ranging from personal injury following an auto accident to workers’ compensation claims.

A recent analysis in Property&Casualty360 compares telemedicine fraud to fake whiplash claims, cautioning that the system “could be exploited to mass-produce false claims.” The National Insurance Crime Bureau recently announced plans to closely monitor the potential for bad actors to exploit the global concerns regarding the coronavirus. While some safeguard measures might be forthcoming, they won’t stop the perniciousness of fraud already underway.

In announcing charges against a telemedicine company, the U.S. Attorney’s Office for the Southern District of Georgia noted their case as indicative of a growing trend.  “As telemedicine becomes an increasing part of our healthcare system, vigilance in ensuring that fraud and kickbacks do not usurp the legitimate practice of medicine by electronic means is more important than ever.”

Ultimately telemedicine has made the claims process so much more prone to fraud. Scammers and schemers, who previously just embellished and exaggerated medical claims are expanding their reach. With our healthcare system inundated with demand in some regions and still bracing for impact in others, bad actors who previously had no scruples about submitting wholly fabricated medical records and provider encounters, are simply adapting to the times and proceeding with fake and questionable claims for benefits, now under the telemedicine moniker.

As we each struggle to imagine what the world will look like three months from now, let alone in a year, medical fraud is a certainty we can act on. Insurers, claims managers, claims administrators, and claims investigators need to quickly head off and deflect the avalanche of new schemes on their way.

David B. Smith, M.H.A. is a licensed private investigator and medical fraud expert with three decades of experience in the field. As the founder of Medical Investigation Group, Inc., he has personally conducted and overseen hundreds of medical and insurance fraud investigations on behalf of the casualty insurance industry throughout the U.S. Contact him at [email protected]