Telemedicine fraud, waste, or abuse remains illegal in the United States. Telehealth fraud refers to illegal activity related to telemedicine services. Numerous federal and state laws exist to prevent abuse of our medical system. Sadly, unscrupulous, greedy providers may exploit virtual healthcare systems for monetary gain.
When this happens, brave whistleblowers may come forward exposing criminal acts. Since it takes great courage to reveal illegal workplace activities, a whistleblower needs protection and sound advice. Consequently, whistleblowers must contact an experienced healthcare fraud attorney as soon as they suspect fraud, waste, or abuse.
Examples of Telehealth Fraud
Telehealth fraud refers to medical fraud related to telemedicine services. In other words, telehealth fraud is similar to any type of healthcare fraud; however, telehealth fraud is not committed in a medical professional’s physical building. This type of fraud happens on-line, by mail, or over the phone. Examples include:
- Billing for services not provided- A healthcare provider files a claim for a virtual visit that never happened.
- Unnecessary prescriptions- If a telemedicine provider has an arrangement with a specific pharmacy and prescribes medicine without a doctor-patient relationship, this is fraud. Furthermore, if a medical professional prescribes unnecessary medications that is illegal.
- Unnecessary procedures- If a telehealth medical practitioner orders excessive, unnecessary lab tests, or imaging, this may be fraud.
- Upcoding or overbilling- When a telehealth provider has a brief call and bills it as an extensive evaluation, this becomes fraud. Also, it is illegal to change medical codes to receive higher reimbursements.
- Kickback schemes- An example may include a medical practice that receives a financial kickback for using a particular durable medical supply company.
- Filing fraudulent claims- This includes identity theft or fake telehealth companies.
- Unnecessary equipment- When a medical professional orders any medical equipment a patient does not need, this is fraud.
Federal Laws Regarding Healthcare Fraud
Several federal laws prohibit telemedicine fraud. Some key laws include:
- False Claims Act (FCA) (31 U.S.C. 3729-3733) – The FCA prohibits filing false claims to the federal government. The FCA allows private citizens with knowledge of a false claim to bring a civil suit on behalf of the US government. Sometimes the government joins in on the case. Either way, an experienced whistleblower attorney remains vital as you navigate through this complicated process.
- Anti-Kickback Statute (AKS) (42 U.S.C. 1320a-7b (b)) – The AKS makes it illegal to receive anything of value for medical referrals. This applies to telehealth patients in federal healthcare programs such as Medicare and Medicaid.
- Stark Law (42 U.S.C. 1395 nn) – Stark Law prohibits medical practitioners from referring patients to any entity in which they have a financial interest. For example, if a doctor owns a medical equipment company, that physician may not refer patients to that company.
- Health Care Fraud Statute (18 U.S.C. 1347) – This law makes it a federal crime to defraud a healthcare benefit company.
Medical professionals that violate federal healthcare statutes may face severe penalties. If found guilty, consequences may include stiff financial penalties, possible prison time, or loss of participation in federal medical insurance programs. It’s important to note, that whistleblowers may receive up to 15-30% of monies recovered in any medical fraud investigation.
Steps to Become a Whistleblower
If you suspect medical fraud is happening where you work there are several steps you must take. First of all, you must decide if you want to report this. Ethically and legally you should report any workplace crime. However, it remains important to BE QUIET about your suspicions. Consider the following steps:
- Contact an experienced whistleblower attorney. This ensures your safety and helps guide you through the legal process if warranted. Your attorney will determine if there is a case.
- Gather evidence- Once again your attorney will advise you on this.
- Discuss your rights with your attorney.
- Report to authorities with your attorney’s help and guidance.
- Do not discuss the situation at work.
Recent Cases Involving Telehealth Fraud
Telehealth medical fraud cases reported in the news often involve millions or billions of tax payer dollars. For example, the DOJ indicted 11 people in connection with a telehealth scheme that charged government insurers $2 billion for orthotic braces and pain creams. Unfortunately, the clinicians’ orders were fake and the devices and pain cream were unnecessary. Charges were filed in 2023.
More recently, a 38 year old Florida man pleaded guilty in federal court for his role in a telehealth fraud scheme. This physician assistant agreed to electronically sign fake physician’s orders for cancer genetic testing even when it was not necessary. He was paid $25 per signature as a “consulting fee.” He was paid just over $212,000. The practice submitted more than $7.3 million in claims. He is scheduled for sentencing on March 13, 2025. His sentence may be no greater than 10 years in prison, 3 years of supervised release, and a fine of $250,000. Needless to say, his participation in these crimes was certainly not worth it.
Common Questions
Q. What is telehealth?
Telehealth refers to the use of digital communication technologies—such as video calls, phone consultations, and online platforms—to provide healthcare services remotely. It allows patients to consult with medical professionals without visiting a physical healthcare facility, improving access to care for those in rural areas, with mobility issues, or seeking convenience in healthcare delivery.
Q. What are common telemedicine providers?
Telemedicine providers come in various forms, offering remote healthcare services across different specialties. Common types include:
Primary Care Physicians – Virtual consultations for general health concerns.
Specialists – Dermatologists, cardiologists, psychiatrists, and other experts offering telehealth services.
Mental Health Therapists – Online therapy sessions provided by licensed counselors.
Urgent Care Providers – Virtual visits for non-life-threatening medical conditions.
Pharmacy-Based Telehealth – Some pharmacies offer telemedicine consultations for minor illnesses and prescriptions.
Q. What are some popular telemedicine services and platforms?
Several telemedicine platforms and services provide virtual healthcare across the U.S. Some of the most well-known include:
- Amwell – Provides virtual urgent care, therapy, psychiatry, and primary care services.
- BetterHelp – A leading platform for virtual therapy and counseling.
- Cerebral – Specializes in online mental health and medication management.
- Doctor on Demand – Features on-demand video visits with doctors, therapists, and psychiatrists.
- Hims & Hers – Provides telehealth services for skincare, hair loss, mental health, and sexual health.
- MDLIVE – Specializes in primary care, dermatology, and behavioral health consultations.
- PlushCare – Focuses on virtual primary care and mental health services, including same-day appointments.
- Sesame – A direct-pay telehealth platform that offers affordable virtual consultations without insurance.
- Teladoc Health – Offers general medical, mental health, dermatology, and chronic care management.
Q. What is telehealth fraud?
Telehealth fraud occurs when healthcare providers or organizations engage in illegal activities related to telemedicine services for financial gain. This can include billing for services that were never provided, prescribing unnecessary medications, ordering excessive tests, or engaging in kickback schemes to exploit virtual healthcare systems. Telehealth fraud is a serious crime under U.S. federal and state laws.
Q. What are some common examples of telehealth fraud?
Some of the most common types of telehealth fraud include:
Billing for services not provided – Charging insurance for virtual appointments that never occurred.
Unnecessary prescriptions – Prescribing medications without a legitimate doctor-patient relationship or for financial gain.
Upcoding and overbilling – Charging for longer or more complex consultations than what actually took place.
Unnecessary procedures and tests – Ordering excessive lab work, imaging, or genetic testing for financial incentives.
Kickback schemes – Accepting illegal payments for referring patients to specific pharmacies, labs, or medical supply companies.
Filing fraudulent claims – Using fake patient information or setting up fraudulent telehealth companies to submit insurance claims.
Unnecessary medical equipment orders – Prescribing and billing for equipment that patients do not need, such as braces or medical devices.
Q. How can I report telehealth fraud as a whistleblower?
If you suspect telehealth fraud at your workplace, follow these steps:
Contact an experienced whistleblower attorney – This ensures your rights are protected and provides legal guidance.
Gather evidence – Collect relevant documents, emails, or communications related to fraudulent activities (only under legal advice).
Understand your rights – A whistleblower attorney can explain protections available under the False Claims Act (FCA) and other laws.
Report to authorities – With legal guidance, report fraud to the Department of Justice (DOJ), Office of Inspector General (OIG), or Centers for Medicare & Medicaid Services (CMS).
Maintain confidentiality – Do not discuss your suspicions at work to avoid potential retaliation or interference in investigations.
Q. What are the penalties for telehealth fraud?
Individuals and organizations found guilty of telehealth fraud face severe legal consequences, which may include:
Heavy financial penalties – Fines ranging from thousands to millions of dollars.
Imprisonment – Some violations carry prison sentences of up to 10 years per offense.
License revocation – Medical professionals may lose their ability to practice.
Exclusion from Medicare/Medicaid – Fraudulent providers can be permanently banned from government healthcare programs.
Recent cases have shown that those involved in telehealth fraud can face years in prison and hefty fines, making compliance with healthcare regulations critical.