Will Lax COVID-19 Telemedicine Rules Lead to Fraud?

The pandemic has changed many industries, but the field most affected by the coronavirus has been healthcare and medicine. As hospitals scrambled to accommodate the high numbers of emergency room and intensive care unit visits, telehealth grew extremely quickly to complement physical contact with hospitals and doctors. In fact, telemedicine grew so rapidly that The Mayo Clinic estimates the field grew ten years of progress within six to eight weeks.

As a result, things have moved too fast for insurance companies to organize their billing claims appropriately, creating a lack of transparency in how medical services are billed and reimbursed. Although telemedicine provides tremendous value for both patients and providers, doubt and confusion are rampant in the state of healthcare today. And for providers who were already opportunistic and predatory, the relaxation, elimination, and suspension of rules during the pandemic have created a massive playing ground for large-scale fraud.

Before the Pandemic

Fraud related to telemedicine before the pandemic was a sign of what could happen if we implemented telehealth on a much bigger scale. Whether it was one-off fraud or constant scheming, the most hurt groups were single-payer systems like Medicare and Tricare which consistently were victimized by telemedicine scams. Marketers would get together insurance beneficiaries and market them as telemedicine companies, giving them access to providers over the phone.

The “telemedicine company” would then recommend expensive drugs, medical equipment, and diagnostics to the physician. The cost of these scams? Just one nationwide scam before the pandemic, which involved free or low-cost orthotic braces, created $1.2 billion in false billing claims.

Before the pandemic, medical applications like telehealth technology were used to help under-served rural patients get in touch with their doctors. It was also used to “store and forward” important medical information, like radiological images. HIPAA rules regarding the technology were strict, and a HIPAA-secure connection was required. If you were a patient who was going to meet with your provider, you had to be at a pre-approved origination site, and your provider had to be at a pre-approved distant site. You also were required to speak on an audio-visual connection. But it’s well-known that American healthcare rules and regulations change daily, and it changed much more drastically when the pandemic arrived.

After the Pandemic

There’s been no question about extending telemedicine technology to everyone during the pandemic. Because of the fast timing, HIPAA and privacy concerns on telehealth platforms were largely relaxed to accommodate the massive influx of patients and providers. Today, video isn’t even required during telehealth appointments.

You can speak to your provider over the phone or over the computer. Patients now send private clinical and medical data directly to their providers. But this has created confusion and uncertainty about how to bill for medical services.

Before the pandemic, the Centers for Medicare and Medicaid Services (CMS) allowed only 101 telehealth services. On March 30, 2020, an additional 85 services were added. A month later, 51 new services were added. This brought up the total from 101 to 241 within a month.

No one knows how long the lax rules of telehealth will last after the pandemic is over. And no one has information about if telehealth will be shrunken down again as a service offered to a select group of patients. The Chicago-based American Medical Association also added to the confusion and chaos by releasing new billing codes and descriptors for telehealth services. But one thing is clear: there was likely massive fraud committed in 2020, and many schemes are still active.

Chaotic, Confusing, and Challenging

Because of the relationship of the American government with states, there are no two states that have the same healthcare guidelines and delivery regulations. State regulation depends on a variety of factors, like if the telehealth technology uses live video or just email/fax/phone or if it offers store-and-forward services, remote patient monitoring, or originating/remote site restrictions. It also depends on whether online prescribing and coding is happening, what geographic locations are offered, and what the form of consent looks like. 35 states have parity laws that require telehealth billing to be reimbursed at the same rate as in-office visits.

Identifying and analyzing telehealth claims doesn’t usually result in any actionable insights. Workers’ compensation, disability carriers, and union welfare trusts are particularly at risk for being bamboozled. When you look at the fraudulent claims singularly, they look legitimate and payable, which provides more fuel for the scam and involved fraudsters. In fact, fraudulent claims and legitimate claims are difficult to distinguish because the scammer won’t disclose that the service was provided through telehealth technology.

What’s worse is that advanced automation technology, like fraud detection algorithms, sophisticated analytics software, and previously-trained billing and clinical data applications, cannot catch the hundreds of physicians that scammers pay under the table. Bills are spread out over hundreds of payers, resulting in even more chaos and confusion, and this negatively affects any analysis because the volume is too low to analyze.

The Future of Medicine

Medical fraud has always been a part of healthcare in the U.S., especially because of the obfuscation created by adding more complexity into an already complicated system. Insurance companies must help sort out these scams moving forward, rather than remaining passive and reactive bystanders. If we don’t prepare now, we’ll have to pay much more later on.