Seven Companies, Four Individuals Indicted in Billion-Dollar Telemedicine Fraud Conspiracy | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Seven Companies, Four Individuals Indicted in Billion-Dollar Telemedicine Fraud Conspiracy

October 16, 2018
by Rajiv Leventhal, Managing Editor
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Four individuals and seven companies have been indicted in a $1 billion telemedicine fraud scheme, the Department of Justice announced this week.

The District Court for the Eastern District of Tennessee unsealed a 32-count indictment on the individuals and companies. The indictment stated that HealthRight LLC, a telemedicine company with locations in Pennsylvania and Florida, and Scott Roix, 52, of Seminole, Fla., and the CEO of HealthRight, pleaded guilty to felony conspiracy for their roles in the telemedicine healthcare fraud scheme in a criminal information. Roix and HealthRight also pleaded guilty to conspiring to commit wire fraud in a separate scheme for fraudulently telemarketing dietary supplements, skin creams, and testosterone, according to DOJ officials.

In addition, three other individuals were indicted along with their compounding pharmacies, Synergy Pharmacy Services, located in Palm Harbor, Fla. and Precision Pharmacy Management, located in Clearwater, Fla.. Another co-conspirator, Larry Everett Smith, of Pinellas Park, Fla. also a pharmacy compounder, and his companies Tanith Enterprises, ULD Wholesale Group, Alpha-Omega Pharmacy, all located in Clearwater, Germaine Pharmacy located in Tampa, Fla., and Zoetic Pharmacy located in Houston, Texas, were all also named as defendants. All the defendants were charged with conspiracy to commit healthcare fraud, mail fraud, and introducing misbranded drugs into interstate commerce, per the indictment.

The indictment alleges that from June 2015 through April 2018, these individuals and companies, together with others, “conspired to deceive tens of thousands of patients and more than 100 doctors” located in Tennessee and elsewhere across the country “for the purpose of defrauding private healthcare benefit programs such as Blue Cross Blue Shield of Tennessee out of approximately $174 million. The indictment further alleges that the defendants submitted not less than $931 million in fraudulent claims for payment,” according to the indictment.

More specifically, according to the indictment, the defendants “set up an elaborate telemedicine scheme in which HealthRight fraudulently solicited insurance coverage information and prescriptions from consumers across the country for prescription pain creams and other similar products.” The indictment states that doctors approved the prescriptions without knowing that the defendants were massively marking up the prices of the invalidly prescribed drugs, which the defendants then billed to private insurance carriers.

In addition to their roles in the healthcare fraud conspiracy, Roix and HealthRight were also charged with conspiring to commit wire fraud as part of a scheme to use HealthRight’s telemarketing facilities to fraudulently sell millions of dollars’ worth of products such as weight loss pills, skin creams, and testosterone supplements through concocted claims of efficacy and intentionally deficient customer service designed to stall consumer complaints, according to the indictment.

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Medi-Cal Telehealth Proposal Called ‘Remarkable Step Forward’

October 30, 2018
by David Raths, Contributing Editor
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Covers payment for dental services as well as treating homebound, seasonal and homeless patients

The California Department of Health Care Services (DHCS) is proposing significant changes to its telehealth policy in the state’s Medicaid program known as Medi-Cal. The nonprofit Center for Connected Health Policy (CCHP) calls the proposal “a remarkable step forward.”

Since the passage of and enactment of AB 415, the Telehealth Development Act, CCHP has noted that DHCS had the ability in law to create a more expansive telehealth policy. Now it has proposed one.

A CCHP report notes that DHCS is soliciting feedback from stakeholders on a proposal that would clarify when services provided outside of the “four walls” of a federally qualified health center (FQHC) or rural health center (RHC) are eligible for the prospective payment system (PPS). The department is proposing that all such services be paid the PPS when rendered to homebound, migratory, seasonal workers and homeless patients, patients in the hospital, dental services rendered to established patients by a contracted dental provider, and telehealth services provided to its established patients when certain requirements are met.  

Providers would still have to document services with the same specificity as would be required when services are provided within the four walls; the FQHC or RHC must provide written policies that describe all of the services that will be provided outside of the four walls, along with circumstances for which the services will be provided; and all HRSA policies and procedures for approved scope of projects apply.

The proposal also lays out specific rules for billing as well as for store-and-forward services provided for ophthalmology, dermatology, and dentistry for its established patients. 

DHCS also is proposing to update and clarify its telehealth policy manuals within the Medi-Cal program. Among the most intriguing proposals in the draft, according to CCHP, is allowing the distant site/treating provider to decide when it is appropriate for telehealth to be used and whether it should be via live video or store-and-forward. 

E-consult (provide-to-provider consultation), falling under the auspices of store-and-forward, would also be reimbursed through two CPT codes, making California and Connecticut the only state Medicaid programs in the country reimbursing for that particular service. Under Medi-Cal’s proposed draft policy, the services would still need to be a Medi-Cal-reimbursable service and the CPT or HCPCS code definition should allow for technology to be used, but CCHP said this proposed policy is far more advanced than most any other Medicaid policies in the country.

 

 

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CMS Proposes to Expand Telehealth Benefits Under Medicare Advantage Plans

October 29, 2018
by Rajiv Leventhal, Managing Editor
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The Centers for Medicare & Medicaid Services (CMS) is proposing to implement several sections of the Bipartisan Budget Act of 2018, including expanding telehealth benefits under Medicare Advantage plans.

In a recent proposed 362-page rule that updates Medicare Advantage (MA or Part C) and the Medicare prescription drug benefit program (Part D), CMS is suggesting to implement a section of the Bipartisan Budget Act of 2018 that enables MA plans to offer “additional telehealth benefits” not otherwise available in original Medicare to enrollees starting in plan year 2020 as part of the government-funded “basic benefits.”

Under this specific proposal, MA plans will have broader flexibility than is currently available in how they pay for coverage of telehealth benefits to meet the needs of their enrollees, CMS stated. “In addition, we solicit comment on how to implement the statutory provision that if an MA plan covers a Part B service as an additional telehealth benefit, then the MA plan must also provide the enrollee access to such service through an in-person visit,” the proposal read.

The proposal went on to note that the original Medicare telehealth benefit “is narrowly defined and includes restrictions on where beneficiaries receiving care via telehealth can be located.” As such, CMS believes that the additional telehealth benefits in MA will increase access to patient-centered care by giving enrollees more control to determine when, where, and how they access benefits.

The proposed rule, according to CMS, would also give MA plans more flexibility to offer telehealth benefits to all their enrollees, whether they live in rural or urban areas. “It would also allow greater ability for Medicare Advantage enrollees to receive telehealth from places including their homes, rather than requiring them to go to a healthcare facility to receive telehealth services. Plans would also have greater flexibility to offer clinically-appropriate telehealth benefits that are not otherwise available to Medicare beneficiaries,” CMS stated.

As such, the federal agency stated that although MA plans have always been able to offer more telehealth services than are currently payable under original Medicare through supplemental benefits, this change in how such additional telehealth benefits are financed makes it more likely that MA plans will offer them and that more enrollees will be able to use the benefits.

The Bipartisan Budget Act of 2018 was signed into law earlier this year, and includes major telehealth advances. Now, CMS believes that this latest proposal will promote “flexibility and innovation so that MA and Part D sponsors are empowered with the tools to improve quality of care and provide more plan choices for MA and Part D enrollees.”

CMS Administrator Seema Verma said in a statement accompanying the proposed rule, “President Trump is committed to strengthening Medicare, and an increasing number of seniors are voting with their feet and choosing to receive their Medicare benefits through private plans in Medicare Advantage. Today’s proposed changes would give Medicare Advantage plans more flexibility to innovate in response to patients’ needs. She added, “I am especially excited about proposed changes to allow additional telehealth benefits, which will promote access to care in a more convenient and cost-effective manner for patients.”

The agency believes that if finalized, the proposed changes would result in an estimated $4.5 billion savings to the Medicare Trust Funds over 10 years, largely arising from recovery of overpayments to MA plans.

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Study Shows Effectiveness of Tele-Rehabilitation Platform

October 23, 2018
by Rajiv Leventhal, Managing Editor
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The Duke Clinical Research Institute (DCRI) has teamed up with a virtual rehabilitation therapy company to test how its digital rehabilitation platform delivered physical therapy following total knee replacement (TKR) surgery.

The randomized controlled clinical trial, "Virtual Exercise Rehabilitation In-home Therapy: A Research Study (VERITAS),” was designed to evaluate the cost and clinical non-inferiority of using a virtual rehabilitation platform from Reflexion Health to deliver physical therapy following total knee replacement surgery.

In the study, VERA, Reflexion Health's virtual exercise rehabilitation assistant, with clinician oversight enabled a substantial reduction in post-acute costs and rehospitalizations while being as effective as traditional physical therapy, according to officials who touted the results this week.

Per the company’s website, VERA is a tele-rehabilitation platform that coaches patients through their prescribed physical therapy exercises, measures progress, and reports outcomes back to their physical therapist. VERA aims to guide and encourage patients to do their best on the path to recovery—all from their own home.

VERITAS was a multi-center, randomized controlled trial that enrolled 306 adult participants scheduled for TKR surgery at four U.S. sites. Of the consented participants, 287 completed the trial. The treatment group concluded with 143 adults who received Reflexion Health's VERA both pre- and post-surgery, compared with a control group of 144 adults who received traditional in-home or clinic-based physical therapy at participating sites. Clinical outcomes, health service use, and costs were examined for three months after surgery.

The study results demonstrated an average cost savings of $2,745 per patient for those who received virtual physical therapy using VERA technology with clinical oversight when compared to usual care with traditional physical therapy. Virtual physical therapy met its secondary effectiveness endpoints of non-inferiority for reducing disability and improving knee function. Compared with usual care, safety endpoints for patients with virtual physical therapy were similar, the results revealed.

"Physical therapy is a critical component of recovery for patients following total joint replacement surgery. As people live longer and these surgeries become more common, it is important to identify solutions that maintain or improve outcomes while decreasing the burden on patients and providers," Janet Prvu Bettger, Ph.D., associate professor with the Duke Department of Orthopedic Surgery and principal investigator of the study, said in a statement. "We are pleased with the results of the study which show that Reflexion Health's VERA coupled with remote clinician oversight, is a cost-effective paradigm for physical therapy—one that is more convenient for patients while providing clinicians greater insight into the recovery process."

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