Finance, Fraud Detection, Healthcare, Telehealth

The New Face of Healthcare Payer Fraud: Tsunami or Passing Trend?

Avijit Datta

Telehealth is likely to sustain its level of adoption in 2021 and, probably, beyond. The growth can be ascribed to the expanded Medicare coverage even before the pandemic hit us.

Medicare and several insurance companies have added telehealth services such as emergency-department visits that would be covered through the end of this public- health emergency. They have also made coverage of certain public health services permanent for people living in rural areas and in nursing or medical facilities. (Between March and October more than a third of the 63 million beneficiaries received a Medicare telemedicine service).

There is little doubt that telehealth enables efficient care and a greater ability to manage chronic diseases.

To the question: Will the extent to which telehealth will be used once medical centers resume more normal operations, the belief is that telehealth is here to stay.

These factors have caused rapid growth in the telehealth industry, as well as new types of fraud.

 

OPPORTUNITY FOR FRAUD

A telehealth company pays physicians and other health care providers to furnish telehealth services to patients. Providers might be paid a fee for each consultation, or they might be paid on an hourly or yearly basis. Telehealth companies generally make money by seeking reimbursement from a patient’s private medical insurer or the government.

Telehealth fraud schemes are varied and subject to constant change. However, recent events indicate that the focus should be on two major types of telehealth fraud schemes.

DURABLE MEDICAL EQUIPMENT (DME) SCHEMES

DME schemes are a traditional health care fraud scheme in which health care providers and DME companies conspire to bill the government or private insurers for medically unnecessary braces, wheelchairs, or other medical equipment.

COMPOUNDING PHARMACY SCHEMES

Generally, a compounding company conspires with a telehealth company to prescribe medically unnecessary compounded drugs to patients. The compounding company then bills the government or private insurers for the unnecessary drugs and pays kickbacks to the telehealth company. In 2018, the CEO of a telehealth company was criminally charged in connection with a $1 billion-dollar compounding pharmacy scheme.

As telehealth services proliferate, telehealth fraud schemes will continue to evolve. The schemes of next year will not look like the schemes of today. Therefore, fraud examiners who work in the health care industry must stay informed about new developments in telehealth and the latest regulatory actions.

 

REMEDY

NEMESIS using artificial intelligence technology substantiates the level of service billed. A patient’s history must deem medically necessary any prescribed home regimen or recommended item of DME despite limited examination. NEMESIS’s efficient use of text analytics, the ability to catch trends in a supervised as well as an unsupervised fashion, and the empowerment of the non-technical investigator with modeling techniques are the keys to circumventing these situations.

NEMESIS also looks for substantial differences in DME among similar items, such as back braces, knee supports, and cervical collars. It checks for DME to be compatible with coded and billed items.

Using its Anomaly Detection functions, NEMESIS can identify “Phantom visits” — billing for nonexistent physician visits — which can proliferate because patients don’t physically sign in. NEMESIS highlights suspicious billing for services not rendered even if a telemedicine visit did occur.

NEMESIS also ensures diagnostic studies are medically necessary and supported by documentation. It identifies widespread referrals, especially to the same facility that can be grounds for abuse and fraud and raises suspicion for illegal kickbacks.

Avijit Datta

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