Fraud is the killjoy at the telehealth party

Doggett is trying to slow down a speeding train, as the House’s 416-12 vote demonstrates. Enthusiasm for telehealth’s convenience has grown, even as the fears of Covid-19 that prompted the Trump administration and Congress to expand it have abated.

But Doggett’s stance reflects longstanding concerns that telehealth could become an enabler of fraud, allowing scammers, doctors and health care companies to order up unnecessary lab tests and medical equipment, or to prescribe unneeded drugs, and bill Medicare.

A separate, but perhaps more expensive problem could arise if telehealth’s ease of use prompts patients to contact their doctors more regularly, driving up costs with frivolous visits without any ill motives.

Though Doggett was one of few to make his apprehension known with a no vote, others acknowledge that the possibility for fraud and overutilization exists. Energy and Commerce Chair Frank Pallone (DN.J.) said as much last week, calling telehealth expansion a “major change” necessitating oversight and investigation.

The problem for Congress is a dearth of data and limited time. To try and get more data, Congress this spring mandated a Department of Health and Human Services watchdog report on fraud risks.

More and more information about how patients used telehealth during the pandemic is coming in, but the clock is ticking. Congress needs to decide what to do soon, since the existing telehealth flexibilities will expire five months after HHS lifts the Covid-19 public health emergency. HHS has extended the emergency 10 times since it was first announced in January 2020, but Biden administration officials are considering sticking to the current expiration date in October.

“When it comes to fraud, it’s a lot of anecdotes,” said Ateev Mehrotra, a professor of health care policy who studies telemedicine at Harvard University. “I’m not blaming anyone. It’s just a hard thing to measure.”

Doggett contends that Congress should build more guardrails before allowing pandemic-era flexibilities to continue. But taking too strict a line could hamper access to care that millions of Americans have come to rely on.

The evidence on fraud

As with in-person care, there is fraud occurring in telehealth — but at what scale and how much relative to in-person care is not yet clear, with little solid evidence available, researchers say. The House bill would give lawmakers more time to study the risks while leaving the status quo in place.

Amid the eased pandemic regulations, HHS’ inspector general was concerned that fraudsters will see the waivers allowing doctors to bill for telehealth services as another way to profit. The inspector general’s office plans to release a report as required by Congress on telehealth fraud risks in the next month or two, said Andrew VanLandingham, senior counselor at the watchdog office.

So far, scammers aren’t overbilling for telehealth services under the new rules “on a widespread basis,” he said.

But VanLandingham was careful to differentiate overbilling from kickback schemes in which doctors receive payments for providing unnecessary serviceshe said.

The Justice Department has made a number of arrests, including recently charging dozens of people in connection with alleged kickback schemes totaling more than $1 billion in which telemedicine companies got providers to order unneeded tests and equipment.

But telehealth advocates and experts argue that much of what the DOJ has found isn’t specific to telemedicine and shouldn’t be cited as reason to restrict telehealth access.

“The headline says telemedicine, but in reality there was actually no telemedicine going on,” said Chad Ellimoottil, an assistant professor at the University of Michigan Medical School and telemedicine researcher. “It was just a corrupt practice that was occurring, obviously targeting seniors and the Medicare program.”

To Doggett, the distinction is largely beside the point.

“Whatever label is applied, it’s all still fraud,” Doggett said. “We should be taking reasonable steps to prevent it, not just responding with prosecutions that usually return no more than pennies on the dollar of stolen billions.”

The Cerebral effect

Fraud isn’t the only threat to telehealth’s expansion. There’s also concern that companies, particularly startups seeking profit, could abuse virtual care by overprescribing drugs.

That fear has taken on new gravity in light of the allegations made against digital health company Cerebral. A former executive sued the company, claiming it tried to prescribe stimulants to all of its patients with attention-deficit/hyperactivity disorder when some may not have needed them.

“When Cerebral determined that patients who were prescribed stimulants were more likely to remain Cerebral customers, the CEO directed Cerebral employees to find ways to prescribe stimulants to more ADHD patients to increase retention,” according to the lawsuit.

The DOJ is now investigating. CEO David Mou has said that news coverage has given a “distorted view of our outstanding care,” and the company has said it follows relevant laws and denied deliberately overprescribing medicine.

But the temptation to do so is there. STAT reported earlier this month on a “Wild West” of weight loss websites offering quick prescriptions via telehealth. The article quoted public health experts raising concerns about telehealth companies that have “seemingly cropped up just to churn out prescriptions for a profit” and potential harm to patients.

“That’s the real issue with telehealth that you’re starting to see,” Miranda Hooker, a partner at Troutman Pepper and a former federal prosecutor, told POLITICO. “Are these services that we should be paying for?”

As with fraud, though, it’s not clear whether overprescribing is a widespread problem.

Regardless, many major pharmacies are taking heed and have stopped filling prescriptions from Cerebral and other digital health companies.


Policymakers looking to restrain the cost of health care also have reason to worry that telehealth could drive overutilization of resources. The convenience of online care could prompt people to schedule more appointments and doctors to request more services than necessary.

The jury is still out on whether that’s the case.

There is some evidence of increased claims for digital health amid expanded access. JAMA Internal Medicine published a research letter by Harvard faculty earlier this month that said Medicare claims for devices that measure blood pressure, diabetes and other health conditions exploded after the government approved them for use at home in 2019. The growth was most pronounced during the pandemic.

“Sometimes it’s easy for us to talk about the fraud because that resonates more, but the bigger policy issue is the overutilization,” Mehrotra said. “The next question is whether that increase in care is low-value or high-value.”

Other research is more encouraging for telehealth advocates. Ellimoottil and colleagues at the University of Michigan found that pandemic waivers didn’t drive up utilization as feared.

Telehealth visits represented about 9 percent of outpatient visits among Medicare beneficiaries by the end of 2021, the study found, and overall outpatient management visits were about 289 million in 2019 before dipping to 255 million in 2020 and 261 million in 2021.

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