Tackling telemedicine fraudsters

Ongoing investigations in the US have revealed telemedicine’s vulnerability to fraudulent activity, with the recent Operation ‘Happy Clickers’ targeting fraud losses of more than $7m. Abi Millar hears from Dickinson Wright attorney Kimberly J. Ruppel about how fraudsters can game the healthcare system under the guise of telemedicine. 


n August, four healthcare practitioners in Michigan were held to account for their role in a telemedicine fraud scheme. Dubbed Operation 'Happy Clickers’, the investigation concerned fraud losses of over $7.3m.

As the investigation revealed, the physicians had signed off on a series of illegitimate orders for braces and cancer genetic screening tests. Unscrupulous telemarketers had targeted people on Medicare, reportedly bombarding them with calls in which they were offered free braces.

Ordinarily, a doctor or nurse would conduct a thorough review any items ordered on behalf of Medicare patients, making sure they were medically necessary. In this instance, the phone calls clearly came from overseas call centres rather than from medical professionals, and the items were irrelevant to the patients.

It was reported that the telemarketers had paid the medical practitioners to approve the orders – sometimes multiple orders for each beneficiary. They then sold the signed orders to the manufacturers, in violation of a federal fraud law called the anti-kickback stature.

“Fraudsters are contacting Medicare beneficiaries directly to offer services or treatment,” explains Dickinson Wright attorney Kimberly J Ruppel. “Often, an unsuspecting patient will provide enough personal information to result in a lab or equipment order that may not even be needed. That information is then sent to a physician to authorise the order, which may not be properly supported, and then a claim is made for reimbursement.”

Kimberly J Ruppel, attorney at Dickinson Wright

In this case, one of the defendants admitted to having signed 335 separate patient files over the course of a week. On average, he had spent just 18 seconds with each file, leading to the designation ‘happy clicker’. And he kept going even after an investigator for a healthcare insurer flagged up the telemarketing. Medicare paid out an astonishing $5.7m for the orders he approved without reviewing.

This defendant, a nurse practitioner, faced criminal enforcement actions for his role in the scam. Meanwhile three medical doctors faced civil liabilities and were ordered to pay sums in the tens of thousands.

“Given that their approval and signatures are necessary for Medicare to pay for these braces and testing, medical practitioners are the professional backstop against these fraud schemes,” said US Attorney Andrew Birge. “And when medical practitioners ignore their professional responsibilities, facilitating these fraud schemes in our district, they will be held accountable.”

A growing problem

This was far from the first, or the worst, instance of telemedicine fraud. In April 2019, 24 people were charged for their participation in healthcare fraud schemes. The defendants, who ranged from doctors to telemedicine executives, were allegedly responsible for over $1.2bn in losses.

In September 2019, one of the largest ever healthcare fraud schemes came to light, after telemedicine companies scammed Medicare out of $2.1bn. In September 2020, 86 defendants were charged with submitting $4.5bn in fraudulent telemedicine claims. An additional 256 medical professionals had their Medicare billing privileges revoked for their involvement in these kinds of schemes.

“Today’s announcement marks the largest amount of fraud ever charged by the Department of Justice in a single national takedown operation,” said acting assistant attorney General Brian Rabbit at a press conference in September 2020.

While the pandemic is not to blame for the increase in fraud, it has resulted in an increase in the use of telehealth services, and some have exploited this situation for personal gain.

With dozens of similar cases making headlines, the question bears asking: why exactly is telefraud on the rise?

“The answer is simple: big money,” says Ruppel. “In 2021 alone, the government has charged defendants with submitting fraudulent telehealth claims in the billions of dollars. Providers who are charged may sign orders presented by a third party for durable medical equipment or genetic testing without reviewing the patient’s medical records or making an independent determination of medical necessity.”

She adds that while the pandemic is not to blame for the increase in fraud, it has resulted in an increase in the use of telehealth services, and some have exploited this situation for personal gain. According to a study published in Health Affairs, the weekly number of telemedicine visits increased 23-fold during the pandemic.

Stamping out telemedicine fraud

What can be done to stop fraudsters from gaming the system in this way? Ruppel says fraud often comes to light as the result of an employee who suspects foul play.

“In the Happy Clickers case, providers under investigation ignored red flags, such as obvious disparities between exam ‘findings’ in patient records and the equipment ordered,” she says. “Also, it’s hard to imagine that 18 seconds is sufficient time to accurately assess a patient’s need for treatment.”

Under the US False Claims Act, whistleblowers who report fraud against governmental programmes may be entitled to receive 15-25% of the amount recovered, so there is certainly an incentive here.

It’s worth mentioning that healthcare fraud is already a major focus for the authorities. Last year, the US Department of Justice recovered $1.8bn in healthcare fraud settlements, and the sheer number of cases brought to light suggests they are keeping the issue top of mind.

The investigation in Michigan uncovered recordings of what sounded like a call center, which should have been a red flag to the clinician.

Regarding telehealth in particular, the US Department of Health and Human Services has said it is “conducting significant oversight work assessing telehealth services during the public health emergency”. It added that it “will continue to vigilantly pursue these telefraud schemes and monitor the evolution of scams that may relate to telehealth”.

So, what kind of message should clinicians take from the Happy Clickers case, and others like it, to stop similar lawsuits coming their way? The real answer is to be vigilant about the orders that are coming through. As Ruppel points out, if something seems too good to be true, it probably is.

“When presented with a large number of orders for equipment or testing obtained by virtual interactions that require little to no review of a patient’s information, the alarm bells should sound,” she says.

“If there is a recording of the interaction with the patient, listen and/or watch it yourself. The investigation in Michigan uncovered recordings of what sounded like a call center, which should have been a red flag to the clinician.”

With telemedicine is here to stay, these kinds of issues are likely to become ever more salient. It will fall to all concerned to act quickly to nip potential telefraud in the bud.