Telehealth In the Spotlight as Justice Cracks Down on Medicare Fraud

As federal officials crack down on multi-million-dollar Medicare fraud cases involving telehealth companies, the American Telemedicine Association issues a statement denouncing the illegal activities.


September 24, 2019 – Telehealth advocates are speaking out against individuals and businesses who have been using connected health services to commit fraud.

This week, American Telemedicine Association CEO Ann Mond Johnson issued a press release denouncing the Video Doctor Network, a Colombia-based company whose owner/CEO pled guilty earlier this month to what officials are calling one of the largest healthcare fraud schemes ever investigated by the US authorities.

“We are appalled at the deceitful, unethical actions and fraudulent business practices of the Video Doctor Network,” Johnson said. “This, in no way, represents the vast majority of telehealth companies – or healthcare companies at large.”

“It is important to note that the brief telephone-based interactions – via Video Doctor Network’s call centers located in the Philippines and across Latin America – are not the appropriate way to establish a valid patient/provider relationship and do not meet the standard of care in most clinical and regulatory contexts,” she added. “A telephone call does not constitute a telehealth interaction.”

Telehealth and mHealth organizations have traditionally steered clear of commenting on indictments and federal court cases because many of the cases don’t actually deal with telehealth services or telemedicine technology.

According to Justice Department officials, the company’s owner and CEO, Lester Stockett, 52, of Medellin, is accused of operating a global scheme in which he and his associates – including two men from Florida – “agreed to solicit and receive illegal kickbacks and bribes from patient recruiters, pharmacies, brace suppliers and others in exchange for arranging for doctors to order medically unnecessary orthotic braces (braces) for beneficiaries of Medicare and other insurance carriers. The beneficiaries were contacted through an international telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America.”

According to Justice officials, the Video Doctor Network included Video Doctor USA (Video Doctor) and Telemed Health Group LLC, doing business as AffordADoc.

Officials said the group paid illegal kickbacks to healthcare providers who ordered medically unnecessary braces for Medicare patients after only a short phone call, and with no other connection between provider and patient. In all, more than $424 million in false and fraudulent claims were filed with Medicare, and the agency paid out more than $200 million.

“This CEO and his co-conspirators lined their own pockets with hundreds of millions of dollars by exploiting telemedicine technology meant to help elderly and disabled patients in need of health care,” Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division said in the Justice Department press release. “Today’s plea shows that the Department of Justice remains laser-focused on uprooting corporate health care fraud schemes, especially those built on the backs of the most vulnerable members of our community.”

Just one week after Stockett pled guilty to one count of conspiracy to defraud the United States and pay and receive health care kickbacks and one count of conspiracy to commit money laundering (he’s due to be sentenced in December), the Justice Department announced another high-profile guilty plea in a Medicare fraud case involving telemedicine.

On Sept. 12, Joseph DeCorso, 62, of Toms River, NJ, pled guilty to taking part in a $13 million fraud scheme, one in which 23 others were charged in April. According to a Justice Department press release, “DeCorso admitted that he worked for two purported telemedicine companies for which he wrote medically unnecessary orders for orthotic braces for Medicare beneficiaries between July 2017 and March 2019.”

“He admitted that his conduct resulted in a $13 million intended loss to Medicare,” the release noted.

The press release laid out how certain people and company operate under the guide of a telehealth service to defraud Medicare.

“DeCorso admitted that in the course of the scheme, an international telemarketing network lured hundreds of thousands of elderly or disabled Medicare beneficiaries into the scheme, which involved call centers throughout the world, which then sent the beneficiaries’ information to several telemedicine companies,” the press release explained. “DeCorso further admitted that he wrote brace orders for the telemedicine companies without speaking to the beneficiaries and that he concealed the fraud with falsified orders that stated, among other things, that he had ‘discussions’ or ‘conversations’ with beneficiaries or had conducted diagnostic testing for beneficiaries, when, in fact, DeCorso had not spoken to beneficiaries and had not conducted diagnostic testing on beneficiaries in connection with the ordering of orthotic braces.”

These cases highlight a challenge facing the telehealth industry. Connected health advocates have long noted that these types of platforms can reduce access issues for patients and allow providers to extend their reach. But they and the healthcare community have long struggled to define how a patient and doctor can establish a proper and secure relationship when they aren’t seeing each other in person.

The issue is particularly problematic in direct-to-consumer phone-based services and asynchronous (store-and-forward) telehealth platforms, in which patient and provider communicate online or by phone, text and messaging platform, rather than a real-time audio-visual portal. In many cases patient and doctor may never actually meet or see each other.

According to Johnson, the ATA “is undertaking an initiative to review state regulations and guidelines related to direct-to-consumer (DTC) asynchronous companies and products, as well as key policy and legal issues, to highlight the appropriate, successful application of DTC technologies.”

View this post on