Telehealth services may be at a crossroads. While the COVID-19 pandemic brought about widespread adoption of telehealth services, the Department of Justice and the U.S. Department of Health and Human Services Office of Inspector General (OIG) appear primed to audit telehealth services and ramp up enforcement actions for services that it deems fraudulent.

Advocates of telehealth services have been touting their capabilities for years; however, it took the COVID-19 pandemic for the services to surge in popularity. The increased utilization of telehealth services is due to a confluence of factors, including Medicare and Medicaid removing regulatory barriers and opening doors for reimbursement of telehealth services during the state of emergency; patients seeking alternative forms of healthcare due to fears of COVID-19 and seeking in-person care; states reducing licensing and other barriers to provide telehealth services across state lines; and healthcare providers reacting to these developments and adapting their care models to respond to the increased demand.

Accordingly, the public reacted and embraced receiving care via telehealth technologies. This has been a boon for the healthcare industry, especially with the number of in-person visits dropping in 2020 due to the pandemic. However, the increased utilization of telehealth services has made health law attorneys cautious, as a rapid increase utilization of a new service line has us waiting with bated breath for the other shoe to drop and result in fraud and enforcement abuse.

In September 2020, OIG announced a healthcare fraud takedown of over 345 defendants and $4.5 billion in allegedly false and fraudulent claims. This crackdown focused on a variety of provider types, including genetic testing laboratories, pharmacies, medical practitioners, and durable medical equipment providers. The crackdown revolved around an alleged schemes where a marketing network lured individuals to obtain durable medical equipment, tests, or medications that OIG deemed worthless and medically unnecessary. OIG found that the healthcare providers performed many of the services with limited or no patient interaction. OIG focused on the misleading and fraudulent nature of the services, which, in some cases, delayed patients from seeking medically appropriate treatment for their complaints. Although OIG has not announced any official policy of auditing, the telehealth industry is reporting that OIG is set to increase audits in the telehealth space. Industry insiders claim that OIG is focused on whether the expansion of telehealth services has led to more fraud and abuse.

Beyond the potential monetary enforcement impact of OIG’s audits, these audits will also likely aid in the continued transformation of the telehealth services industry, as OIG plans to release an audit report with policy recommendations by early 2022. Many of the changes to telehealth by the Centers for Medicare and Medicaid Services and on a state level were temporary for the pandemic. Now, the federal government and state legislators are debating whether they should make permanent any easing of regulatory burdens. OIG’s audit findings and policy recommendations could impact how telehealth services evolve, including the telehealth requirements that Medicare and Medicaid will determine are necessary for reimbursement. Some of these impacts may include policy recommendations on what types of healthcare providers can offer telehealth services, what technological capabilities are required for telehealth (e.g., synchronous vs. asynchronous, audio/video requirements), and whether there are any location requirements for telehealth (e.g., only available in rural locations, must have an in-person visit every X months). We will continue to monitor the developments in this space.