Fierce Exclusive: As telemedicine grows, so do underlying fraud and abuse considerations

Touting accessibility and affordability, telemedicine is poised to make a huge splash in the healthcare industry in the coming years. The global telemedicine market is expected to reach 7 million patients worldwide by 2018, fueling an 18 percent growth rate by 2020.

The one thing holding it back: Reimbursement. Discussions surrounding telemedicine reimbursement peaked earlier this year as legislators debated whether to include reimbursement changes in the 21st Century Cures Act, which passed the House in July but has encountered roadblocks in the Senate. Although telemedicine reimbursement was ultimately left out of the bill, it does include provisions requiring the Centers for Medicare & Medicaid Services to report on barriers to telemedicine use, including reimbursement considerations.

Lingering beneath these discussions are ongoing considerations for fraud and abuse laws that could have a far-reaching impact if the federal government elects to reimburse for telehealth services. But even now, telemedicine agreements can be subject to federal kickback laws, particularly in situations involving referrals for other paid services, Kristi Kung (right), a senior associate at Pillsbury Winthrop Shaw Pittman LLP, said in an exclusive interview with FierceHealthPayer: Antifraud. Kung led a discussion on fraud and abuse in telehealth at the Fraud and Compliance Forum hosted by the American Health Lawyers Association in September.

"The common perception in the industry is that because telehealth is not totally reimbursed by Medicare, fraud and abuse issues like Stark Law and anti-kickbacks aren't a concern in these types of arrangements, and that's not always true," she says. "Even if the telehealth service itself is not reimbursable, the parties may still be in a position to refer other reimbursable healthcare items or services to one another."

Kung adds that telemedicine should not be viewed as a special service line, but as an alternate method of delivering traditional medicine through the use of technology. The same fraud and abuse laws apply, albeit with an added twist.

"There may be some interesting issues that come about because it's a telehealth arrangement and an electronic delivery, like privacy and security issues are more prevalent, but just because it's telehealth doesn't mean you need to look at fraud and abuse risks differently," she says.

Navigating kickbacks and fair market value

Generally, the same legal principles that govern to face-to-face encounters also apply to telemedicine encounters, particularly as it relates to Stark Law and anti-kickback statutes.

Because telemedicine is not reimbursed by Medicare or Medicaid, except in limited circumstances, Stark Law would only apply if a telemedicine provider is referring other reimbursable designated health services. Once those referrals are initiated, providers will need to review Stark exemptions.

"The telehealth arrangement can be a financial arrangement between those two parties, but it would be analyzed in the same way that you would analyze a financial relationship between two parties that didn't involve telehealth," Kung says. "If it was just a physician renting space from a hospital, you would look at in in the same type of way."

Fair market value is another key consideration that pertains to telehealth, and it's an issue that has been on the radar of the Office of Inspector General (OIG). Like other services, financial agreements with telehealth providers must reflect fair market value, particularly if the provider is making referrals. For example, entities that provide free telemedicine equipment could trigger a red flag if they are getting additional reimbursed referrals as a result.   

Reimbursement changes will alter fraud and abuse risks

Increasingly, private insurers are covering telemedicine services, in some cases because state law requires them to do so. Twenty-nine states and the District of Columbia have state parity laws that require insurers to cover telemedicine services the same as in-person encounters, according to the American Telemedicine Association. Some insurers, such as UnitedHealth, are providing broader coverage by partnering with apps such as Doctor on Demand, NowClinic and Amwell.

In these instances, both payers and providers also need to consider specific state anti-kickback laws that can run the gamut in terms of the exemptions that are included.

Medicare covers telehealth services in very limited circumstances, but Kung says that fraud and abuse considerations will only become more important as the government considers ways to provide more comprehensive coverage. Since 1998, the OIG has issued four Advisory Opinions about telehealth services, all of which have been favorable to telehealth arrangements. The latest one, which was released in 2011, noted that the proposed arrangement to provide telemedicine stroke services "is unlikely to result in increased costs to the federal healthcare programs" since "few--if any--of the consultations… would be billable to Medicare."

"One of the safeguards common in three out of the four [Advisory Opinions] was that the telehealth service were not currently reimbursable by a federal healthcare program," Kung says. "That at least indicates the OIG's position may change if the reimbursement structure changes."

Since federal reimbursement is limited, many current telemedicine arrangements are safeguarded, Kung adds. Once that service is reimbursable, fraud and abuse laws will play a larger role in those agreements.

"I would say parties that are using telehealth shouldn't be ignoring fraud and abuse laws now," Kung says. "They should be looking at it now even though reimbursement is somewhat limited, both at the federal level and at the state level."