In July 2022, the United States Department of Justice (DOJ) announced criminal charges against three dozen defendants in thirteen federal districts across the United States. The 36 defendants are charged with alleged fraudulent telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment (DME) schemes.
Included in the defendant count are a telemedicine company executive, owners and executives of clinical laboratories, durable medical equipment companies, marketing companies, and medical professionals. According to court documents, telemedicine companies allegedly arranged for medical professionals to order expensive genetic tests and durable medical equipment irrespective of whether the patients needed them, allegedly ordered without any patient interaction or only a brief telephonic conversation. The DOJ alleges that the test results or DME were not ever provided to the patients or were of no value to their primary care doctors.
The investigation was conducted with cooperation of several federal agencies, including DOJ, the FBI, and the Department of Health and Human Services (HHS), and primarily focused on alleged schemes that involved the payment of illegal kickbacks and bribes by laboratory owners and operators in exchange for patient referrals by medical professionals working with fraudulent telemedicine and digital medicine technology companies.
The DOJ notes that the court documents allege that medical professionals made referrals for “expensive and medically unnecessary cardiovascular and cancer genetic tests, as well as durable medical equipment,” offering the example of cardiovascular genetic testing, which was not a method of diagnosing whether an individual had a cardiac condition at present and was not approved by Medicare for use as a general screening test to evaluate whether a patient had an increased risk of developing cardiovascular conditions in the future.
One example of the alleged scheme offered by the DOJ involved the operator of multiple clinical laboratories who paid more than $16 million in kickbacks to marketers who paid kickbacks to telemedicine companies and call centers in exchange for doctors’ orders. According to the DOJ, orders for cardiovascular and cancer genetic testing were used by the owner (and others) to submit more than $174 million in false and fraudulent claims to Medicare – testing that was not even used in the treatment of the patients. The DOJ says that the operator then allegedly laundered the proceeds of the fraudulent scheme through a network of bank accounts and entities, ultimately purchasing luxury vehicles, a yacht, and real property. That particular indictment seeks more than $7 million in United States currency, three properties, the yacht, and several vehicles (including a Tesla) as forfeiture.
Relevant Links
The DOJ issued several links in conjunction with the press release:
- Telemedicine Enforcement Action – a synopsis of the actions taken with respect to these cases, including infographics
- Telemedicine Court Documents – a list of current Indictments and Informations filed in individual cases.
- Telemedicine Case Summaries – a list of summarized criminal charges related to this alleged telemedicine fraud scheme
More to Come?
According to the DOJ, these charges are some of the first prosecutions related to fraudulent cardiovascular genetic testing in the United States. However, based on the DOJ comment that this is a “burgeoning scheme,” we may be seeing more in the months to come.
On the same day, the Centers for Medicare and Medicaid Services (CMS) Center for Program Integrity (CPI) announced that it took administrative actions against 52 providers for their alleged involvement in similar schemes.
“The Centers for Medicare & Medicaid Services continues to aggressively investigate fraud, waste and abuse and has taken action to protect patients, critical health care resources and to prevent losses to the Medicare Trust Fund,” said CMS Administrator Chiquita Brooks-LaSure. “Work like this to combat fraud, waste, and abuse in our federal programs would not be possible without the successful partnership of CMS, the Department of Justice, and the U.S. Department of Health and Human Services Office of Inspector General.”