The Office of the Inspector General issued a special fraud alert in July on telehealth fraud, only the fourth special fraud alert in the past decade. The Fraud Alert warns against misleading marketing practices and highlights the importance of transparency. Jeremy Sherer, co-chairman of Hooper, Lundy & Bookman’s The Digital Health Practice Group describes what this means for telehealth companies.
News from MedCity: What do GCs need to know to advise healthcare clients in light of this fraud alert?
Sherer: There’s a clear focus on the way companies trade now, and it’s not just from the OIG. We’ve also recently seen attention from the FTC. The big takeaway is the importance of transparency about who is advertising and what their relationship is with a medical practice or a managed services organization (MSO) that provides services to a medical practice.
And then, although it’s nothing new, physician compensation must match fair market value and be documented. Based on this special fraud alert, it is clear that there are concerns about compensation based on volume or value of referrals or business otherwise generated between the parties, which of course is “fraud and abuse 101”. There are and will continue to be bad actors in healthcare, this is nothing new. GCs should do everything possible to avoid their company being mistaken for a “bad guy” and document the steps they take to ensure they comply with the law.
MedCity News: Can you talk a little bit about some of the specifics of what is being described as “suspicious behavior”?
Sherer: What is interesting about this particular fraud alert, and what was somewhat new, is the dual emphasis on marketing and clinical decision-making. On the marketing side, the OIG is concerned when companies’ marketing efforts target Medicare beneficiaries and advertise free or low-cost products, including copayment waivers. The big thing that stands out here, though, is the concern around models where practitioners have limited choice in the treatments they can prescribe or the ways they can communicate with patients.
In particular, the special fraud alert points to remote patient monitoring, which, when done correctly, is a great tool from a preventative care perspective. What I think people need to think about, though, is in clinical areas where they often use certain tools like remote patient monitoring, does the delivery model hinder the tools available to practitioners. Put another way, if a clinician working at an RPM company believes that a different clinical intervention than RPM is appropriate, or that the patient really should be referred to a different type of specialist, does he have the ability to make that recommendation?
News from MedCity: So in terms of how it could be seen as a scam, what would be the suspicious part here?
Sherer: Regulators are concerned about scenarios where medical practitioners are motivated, usually by payment, to prescribe medically unnecessary treatment. A model where practitioners are paid based on the number of prescriptions they write is a red flag because the compensation structure incentivizes the provider to prescribe drugs regardless of whether it is the best treatment option for the patient. The OIG is also concerned about scenarios where there is limited clinical interaction between the practitioner and the patient. It is important to document clinical protocols and establish evidence that practitioners are making genuine clinical decisions based on large amounts of clinical patient data, ideally approaching the type and volume of information that would be available to the practitioner in personal interaction. This includes having the full range of clinical tools available to the practitioner.
News from MedCity: What do you expect to see as a result of this fraud alert?
Sherer: For a long time, many telehealth companies structured themselves as direct-to-consumer models, which meant they didn’t participate in commercial or federal health insurance programs like Medicare and Medicaid. As the digital health industry has grown and many of these companies have become more successful, more and more have begun to participate in federal health insurance programs, meaning they are now subject to federal fraud and abuse laws and are within the OIG’s jurisdiction. So, based on this particular fraud alert, I think we can certainly count on an increased volume of investigative activity, particularly with regard to telehealth companies.
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