Telehealth Fraud Alert Issued by OIG

Telehealth exploded after the federal government relaxed regulations and encouraged healthcare providers to offer e-visits or virtual appointments to patients during the COVID-19 public health emergency. The global telehealth market was USD 41.63 billion in 2019 and is projected to grow from USD 79.79 billion in 2020 to USD 396.76 billion in 2027.[1]



The telehealth spectrum of options is broad, ranging from various types of synchronous (real-time interactions between providers and patients) to asynchronous sessions, and may rely on telephone or video calls, text or email messaging, artificial intelligence (AI), remote patient monitoring, and smartphone mobile health or “mHealth” (digital applications through digital and wireless technologies).




Particularly for rural or remote areas that lack sufficient healthcare services — especially specialty care — telehealth has become a mainstay. Attitudinal surveys indicate that growing numbers of Americans welcome telehealth as a convenient and comparable option to many types of in-person visits. Besides convenience and overcoming logistical barriers to care, additional factors driving telehealth growth include reductions in healthcare costs and technological advancements, such as the Internet of Things (IoT,) i.e., systems of interrelated computing devices; mechanical and digital machines; objects, animals or people that are provided with unique identifiers (UIDs); and the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction. Considering the looming physician shortage, telehealth’s potential to mitigate practical issues surrounding higher patient volumes is perhaps immense.


Unfortunately, as with most booming industries, examples of telehealth fraud are rampant. The Health and Human Services (HHS) Office of Inspector General (OIG) recently released a fraud alert due to the growing number of investigations, including the following:

While the widening array of telehealth options introduces many benefits, it also creates ample opportunities for scammers. It’s important to note that, as with most things, if the deal seems too good to be true, it probably is. Alongside a statement supporting legitimate telehealth arrangements, to help healthcare providers sniff out scams, the OIG listed the following 7 warning signs for telehealth fraud and abuse:

  • The purported patients for whom the provider orders or prescribes items or services were identified or recruited by the telehealth 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 provider does not have sufficient contact with or information from the purported patient (e.g., cursory medical records or audio-only technology) to meaningfully assess the medical necessity of the items or services ordered or prescribed.

  • The telehealth company compensates the provider based on the volume of items or services ordered or prescribed, which may be characterized to the provider as compensation based on the number of purported medical records that the provider reviewed.

  • The telehealth company only furnishes items and services to Federal healthcare program beneficiaries and does not accept insurance from any other payor.

  • The telehealth company claims to only furnish items and services to individuals who are not Federal healthcare program beneficiaries but may in fact bill Federal healthcare programs.

  • The telehealth 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 provider's treating options to a predetermined course of treatment.

  • The telehealth company does not expect providers (or another provider) to follow up with purported patients nor does it provide them with the information required to follow up with purported patients (e.g., the telehealth company does not require providers to discuss genetic testing results with each purported patient).

When we work with clients to review telehealth arrangements, we focus on determining fair market value compensation for actual services provided. Additionally, we want to be certain that compensation does not vary based on the volume or value of referrals to the parties and that there is a legitimate business purpose for the transaction. As telehealth opportunities continue to expand and evolve, compliant arrangements will be poised for success. Contact us for FMV questions or assistance with determining fair market value compensation for telehealth services.


For more information on telehealth, CMS has provided this helpful e-book: Telehealth for Providers: What you Need to Know (PDF)

[1] https://www.fortunebusinessinsights.com/industry-reports/telemedicine-market-101067