OIG report flags telehealth insurance fraud, recommends CMS beef up oversight

A mental health provider billed an average of four hours per visit for 37 different visits. The provider and six others who overbilled for providing telehealth services to Medicare beneficiaries during the first year of the COVID-19 pandemic all worked for the same chain of mental health and substance abuse offices in Florida.

What are the chances?

Slim to none, according to government healthcare researchers investigating dubious telehealth billing practices for Medicare beneficiaries. Their findings are contained in a report by the Department of Health and Human Services’ Office of Inspector General.

There’s more.

“One physician billed for telehealth and then ordered medical equipment and supplies for more than 400 beneficiaries, representing nearly 78% of their beneficiaries,” the report states. “This physician ordered 109 different types of medical equipment and supplies, totaling more than $9 million. The physician did not have an established relationship with any of the 400 beneficiaries and appeared to provide services through a telehealth company.”

It must be noted quickly that these examples represent extreme outliers. Researchers analyzed Medicare fee-for-service and Medicare Advantage data from March 1, 2020, to Feb. 28, 2021, from approximately 742,000 providers who billed for a telehealth visit. More than 28 million beneficiaries, about 2 in 5, used telehealth services during that time.

“We identified 1,714 providers whose billing for telehealth services during the first year of the pandemic poses a high risk to Medicare,” the report states. “These providers billed for telehealth services for about half a million beneficiaries. They received a total of $127.7 million in Medicare fee-for-service payments.”

In other words, a very small proportion of the telehealth claims gave researchers pause. Still, the Centers for Medicare & Medicaid Services (CMS) apparently wants to nip such problems in the bud, and officials did find at least one red flag. Over half of the providers whose billing raised suspicions worked in physician practices where at least one other doctor also filed such claims.

“This may indicate that certain practices are encouraging such billing among their associated providers,” the report states. “Further, 41 providers whose billing poses a high risk appear to be associated with telehealth companies; however, there is currently no systematic way to identify these companies in the Medicare data.”

Responding to the COVID-19 pandemic, CMS lifted restrictions for telehealth use and increased the types of services that Medicare beneficiaries could obtain via telehealth from 118 to 264. Not surprisingly, in the first year of the pandemic, Medicare beneficiaries used 88 times more telehealth services than they did the prior year, the report notes.

Before the pandemic, Medicare beneficiaries could use telehealth only in medical facilities in rural areas, but most could use the services during the pandemic no matter where they lived and from their homes, as well. Before the pandemic, telehealth visits had to be audio-video. During the pandemic, audio-only visits were allowed.

The report suggests that CMS tighten its oversight of telehealth use to help protect beneficiaries and the system itself from fraud, waste and abuse. The report recommends that CMS:

  • Reinforce monitoring and oversight
  • Educate physicians about proper billing procedures for telehealth
  • Improve transparency so it’s apparent that the physician is providing the telehealth service and not a member of their staff
  • Find out the identities of contractors who provide telehealth guidance for physician offices
  • Contact providers identified as incorrectly billing Medicare in the report to find out why