OIG Issues a Special Fraud Alert Advising Practitioners to Exercise Caution When Entering Into Arrangements With Telemedicine Companies

August 1, 2022
By: Grace D. Mack, Esq.

On July 20, 2022, the Office of Inspector General (OIG) published guidance (OIG Guidance) demonstrating various ways telemedicine companies have been engaging in fraudulent and illegal activities.

The OIG has conducted numerous investigations of fraud schemes involving telemedicine services. Such fraudulent schemes include telemedicine companies intentionally paying physicians and non-physician practitioners kickbacks to generate orders or prescriptions for medically unnecessary durable medical equipment, genetic testing, wound care items, or prescription medications, resulting in submissions of fraudulent claims to Medicare, Medicaid, and other Federal health care programs.

The OIG Guidance addresses elements common to these schemes in order to bring awareness to possible fraudulent arrangements. In many of these arrangements, telemedicine companies pay practitioners in exchange for ordering or prescribing items or services for purported patients with whom the practitioners have limited, if any, interaction; and without regard to medical necessity. Indicators of fraudulent use of telemedicine include:

  • Telemedicine companies informing practitioners that they do not need to contact the purported patient.
  • Telemedicine companies informing practitioners that they only need to speak to the purported patient by phone.
  • Practitioners not given the opportunity to review the purported patient’s medical records.


The OIG Guidance raises concerns over fraud schemes perpetuated by telemedicine companies because of the potential for harm to Federal health care programs and their beneficiaries which may include:

(1) an inappropriate increase in costs to Federal health care programs for medically unnecessary items and services,

(2) potential to harm beneficiaries, and

(3) corruption of medical decision-making.

The OIG Guidance addresses multiple Federal laws implicated in telemedicine fraud schemes including the Federal anti-kickback statute. The Federal anti-kickback statute prohibits knowingly and willfully soliciting or receiving any remuneration in return for among other things, referrals for, or orders of, items or services reimbursable by a Federal health care program.[1] The statute imposes liability to parties on both sides of an impermissible kickback transaction which means practitioners may be held personally liable for fraudulent arrangements with telemedicine companies.

The OIG has investigated numerous fraud cases involving kickbacks from telemedicine companies to practitioners who inappropriately ordered or prescribed items or services reimbursable by Federal health care programs in exchange for remuneration. Participants in these schemes have been held criminally and civilly liable for violating the Federal anti-kickback statute, False Claims Act, and other Federal laws.

Finally, the OIG Guidance provides a list of suspect characteristics related to practitioner arrangements with telemedicine companies which could suggest an arrangement that presents a heightened risk for fraud.

  • The purported patients for whom the Practitioner orders or prescribes items or services were identified or recruited by the Telemedicine Company, telemarketing company, sales agent, recruiter, call center, health fair, and/or through internet, television, or social media advertising for free or low out-of-pocket cost items or services.
  • The Practitioner does not have sufficient contact with or information from the purported patient to meaningfully assess the medical necessity of the items or services ordered or prescribed.
  • The Telemedicine Company compensates the Practitioner based on the volume of items or services ordered or prescribed, which may be characterized to the Practitioner as compensation based on the number of purported medical records that the Practitioner reviewed.
  • The Telemedicine Company only furnishes items and services to Federal health care program beneficiaries and does not accept insurance from any other payor.
  • The Telemedicine Company claims to only furnish items and services to individuals who are not Federal health care program beneficiaries but may in fact bill Federal health care programs.
  • The Telemedicine Company only furnishes one product or a single class of products (e.g., durable medical equipment, genetic testing, diabetic supplies, or various prescription creams), potentially restricting a Practitioner's treating options to a predetermined course of treatment.
  • The Telemedicine Company does not expect Practitioners (or another Practitioner) to follow up with purported patients nor does it provide Practitioners with the information required to follow up with purported patients (e.g., the Telemedicine Company does not require Practitioners to discuss genetic testing results with each purported patient).

Practitioners should use heightened scrutiny, exercise caution, and consider the above list of suspect criteria when entering into arrangements with telemedicine companies.

If you have any questions about this Alert, please contact Grace Mack, Esq. or any member of the Wilentz Health Law team.

Special thanks to law student and Wilentz summer clerk Hannah Nagy for her assistance with this Alert.


[1] Section 1128(b)(B) of the Social Security Act.

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