Audits of Telehealth Services are Increasing. Do Your Telehealth Services Meet Applicable Requirements?

/ Medicare, Medicaid & Private Payor Updates / By

Audits of Telehealth Services are Increasing(Updated September 22, 2019): The use of “telehealth” technologies to diagnose and treat patients can be used to address provider shortages, improve patient access to otherwise unavailable specialized services, reduces costs, and provides an effective way to monitor the status of patients from long distances. The many benefits of telehealth have been readily recognized by health care providers, payors and most importantly, patients. Unfortunately, the expanded use of telehealth services hasn’t gone as smoothly as hoped. In recent years, a number of investigations brought by federal and state regulators have identified telehealth cases involving significant overpayments, violations of the False Claims Act and instances of criminal conduct. This article examines the current enforcement landscape facing telehealth providers and discusses ways that a provider can better meet its obligations under the law and reduce a telehealth provider’s level of regulatory risk.

[Our February 2020 article examining DME telemedicine issues titled "Telemedicine Audits of Evaluations by Referring Physicians are Increasing" can be viewed at this link.]

I. "Telehealth” versus “Telemedicine":

The Health Resources Services Administration (HRSA), an agency of the U.S. Department of Health and Human Services (HHS), has defined the term "telehealth" as the:

"[U]se of electronic communication and information technologies to provide or support long-distance clinical health care, patient professional health-related education, public health, and health administration."[1]

The most common technologies used to provide telehealth services include videoconferencing, the internet, store-and-forward imaging, streaming media, and terrestrial and wireless communications.

Telehealth is different from telemedicine because it refers to a broader scope of remote healthcare services than telemedicine. While telemedicine refers specifically to remote clinical services, telehealth can refer to remote non-clinical services, such as provider training, administrative meetings, and continuing medical education, in addition to clinical services.

II. Background of Medicare Telehealth Coverage Requirements:

The Balanced Budget ACT of 1997 (BBA) mandated that Medicare cover certain Fee-For-Service (FFS) payments for “telehealth” services beginning in 1999. The BBA also provided for the funding of telehealth demonstration projects. Initially, covered telehealth services were limited to only those provided to Medicare beneficiaries in health professional shortage areas (HPSAs). Additionally, the legislation mandated that Medicare practitioners be with the patient (and function as a “telepresenter”) when the telehealth consultation was conducted. Not surprisingly, these restrictions were viewed as practically unworkable by health care providers and patients alike. Subsequent legislation under the Benefits Improvement and Protection Act of 2000 (BIPA) amended portions of the BBA and expanded Medicare‘s telehealth payment rules.

The list of telehealth services that may qualify for coverage under Medicare are released each year through the annual physician fee schedule rulemaking process. As a general rule, Medicare Part B will pay for covered telehealth services[2] when they are furnished by an interactive telecommunications system[3], as long as the following requirements are met:

  1. The physician or practitioner at the distant site must be licensed to furnish the service under State law. The physician or practitioner at the distant site who is licensed under State law to furnish a covered telehealth services described in this section may bill, and receive payment for, the service when it is delivered via a telecommunications system.
  2. Under 42 C.F.R. § 410.78(b)(2), the following providers qualify as a “practitioner at the distant site:”
    1. A physician as described in 42 C.F.R. § 410.20.
    2. A physician assistant as described in 42 C.F.R. § 410.74.
    3. A nurse practitioner as described in 42 C.F.R. § 410.75.
    4. A clinical nurse specialist as described in 42 C.F.R. § 410.76.
    5. A nurse-midwife as described in 42 C.F.R. § 410.77.
    6. A clinical psychologist as described in 42 C.F.R. § 410.72.
    7. A clinical social worker as described in 42 C.F.R. § 410.73.
    8. A registered dietitian or nutrition professional as described in 42 C.F.R. § 410.134.
    9. A certified nurse anesthetist as described in 42 C.F.R. § 410.69.

    Please note, as set out under 42 C.F.R. § 410.78(e)(1), clinical psychologists and clinical social workers cannot bill Medicare for medical evaluation and management services. They may only bill and receive payment for individual psychotherapy via a telecommunications system.

    Additionally, as provided under 42 C.F.R. § 410.78(e)(2), physician visits required under 42 C.F.R. § 483.40(c)[4] may not be furnished as telehealth services.

  3. The telehealth services are furnished to a beneficiary at an “originating site.”[5] Under 42 C.F.R. § 410.78(b)(3), an originating site includes one of the following:
    1. The office of a physician or practitioner
    2. A critical access hospital (as described in section 1861(mm)(1) of the Social Security Act).
    3. A rural health clinic (as described in section 1861(aa)(2) of the Social Security Act).
    4. A Federally qualified health center (as defined in section 1861(aa)(4) of the Social Security Act).
    5. A hospital (as defined in section 1861(e) of the Social Security Act).
    6. A hospital-based or critical access hospital-based renal dialysis center (including satellites).
    7. A skilled nursing facility (as defined in section 1819(a) of the Social Security Act).
    8. A community mental health center (as defined in section 1861(ff)(3)(B) of the Social Security Act).
  4. As required out under 42 C.F.R. § 410.78(b)(3), to qualify as an originating site, the location must also be:
    1. Located in a health professional shortage area (HPSA), as defined under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A)), that is either outside of a Metropolitan Statistical Area (MSA) as of December 31st of the preceding calendar year or within a rural census tract of an MSA as determined by the Office of Rural Health Policy of the Health Resources and Services Administration as of December 31st of the preceding calendar year, or
    2. Located in a county that is not included in a Metropolitan Statistical Area as defined in section 1886(d)(2)(D) of the Act as of December 31st of the preceding year, or
    3. An entity participating in a Federal telemedicine demonstration project that has been approved by, or receive funding from, the Secretary as of December 31, 2000, regardless of its geographic location.

The medical examination of the patient is under the control of the physician or practitioner at the distant site. Additionally, as set out under 42 C.F.R. § 410.78(c), a telepresenter is not required as a condition of payment unless it is determined to be medically necessary by the physician or practitioner at the distant site.

Simply put, to qualify under Medicare as covered telehealth services, providers must take ensure that each element of the telehealth services comply fit within the restrictions set out above.

III. Medicaid Telehealth Services:

As with the case of Medicare, state Medicaid telehealth guidelines require that all qualified practitioners providing telehealth services meet the requirements of their State Practice Act. With respect to the coverage and payment of telehealth services, the Medicaid programs of 49 states and the District of Columbia currently pay for live video telehealth services as long as jurisdiction specific requirements have been met. For example, as long as all applicable requirements are met, Texas Medicaid will pay for live video and for store-and-forward telehealth services[6] (in certain circumstances). In Texas, Medicaid also covers home telemonitoring as long as certain conditions are met. It is important that you conduct a careful review of your state’s requirements and restrictions before assuming that your state’s Medicaid program will cover telehealth services.

IV. Private Payor Coverage of Telehealth Services:

Over the last decade, considerable progress has been made with respect to the coverage and payment of telehealth services by private payors. This is due, in large part, to the passage of various private payor parity laws. At last count, 39 states and the District of Columbia have enacted such laws.[7] Private payor parity laws vary from one jurisdiction to another. While some states laws focus on the types of specialty services qualify for telehealth coverage, other states have also enacted laws that require payers to treat telehealth-delivered care the same way as in-person care with respect to reimbursement.

V. OIG Telehealth Report Findings:

As the telehealth services industry has grown, regulatory compliance concerns have also increased. Both governmental and private payors have identified a number of program integrity risks that require ongoing monitoring and assessment. In recent years, the OIG has included a number of telehealth-related projects as part of their Work Plan. Most recently, the OIG identified the use of unauthorized telehealth originating site as areas of deficiency in its recent report titled “CMS Paid Practitioners for Telehealth Services that Did Not Meet Medicare Requirements.”[8] As reflected in the OIG’s report, after reviewing a sample of 100 claims:

  • 24 claims were unallowable because the beneficiaries received services at nonrural originating sites,
  • 7 claims were billed by ineligible institutional providers,
  • 3 claims were for services provided to beneficiaries at unauthorized originating sites,
  • 2 claims were for services provided by an unallowable means of communication,
  • 1 claim was for a noncovered service, and
  • 1 claim was for services provided by a physician located outside the United States.[9]

Collectively, 31 out of 100 claims (31%) of the telehealth claims examined by the OIG did not meet Medicare’s requirements for coverage and payment.

VI. Telehealth Fraud Cases:

The following cases are illustrative of the various types of telehealth fraud cases that are being identified, investigated and prosecuted around the country:

  • (2019): New Jersey. In this case, a New Jersey physician plead guilty to working for two telemedicine companies for which he wrote medically unnecessary orders for orthotic braces for Medicare beneficiaries. His conduct resulted in $13 million in losses to Medicare.
  • (2019): New York. The government recently charged an anesthesiologist fir her role in telemedicine fraud. The physician allegedly ordered and prescribed durable medical equipment (DME) and prescription drugs in connection with purported telemedicine services. The government claims that the physician and other providers signed prescriptions and order forms for DME and drugs that were not medically necessary and that were induced by kickbacks, and provided for beneficiaries whom Steiner and others had not examined and evaluated.
  • (2019): Medellin, Colombia. In this case, the owner of a telemedicine company admitted that he and others agreed to solicit and receive illegal kickbacks and bribes from patient recruiters, pharmacies, brace suppliers and others in exchange for arranging for doctors to order medically unnecessary orthotic braces (braces) for beneficiaries of Medicare and other insurance carriers. The beneficiaries were contacted through an international telemarketing network that lured hundreds of thousands of elderly and/or disabled patients into a criminal scheme that crossed borders, involving call centers in the Philippines and throughout Latin America.
  • (2018): Tennessee. The government recently charged four individuals and seven companies with fraud for their involvement in an alleged fraud scheme that resulting in almost $1 billion in claims being submitted to insurance payors.[10] The government has alleged that a defendant telemedicine company had their employees call and impersonate medical professionals in order to obtain information from patients. The telemedicine company then contacted local physicians and falsely advised them that an electronic consultation was ready for their review. The prescribing physicians were led to believe that a licensed health professional (not merely a telemedicine company employee) had examined the patient’s medical history and that the patients had requested the drug at issue. The case is ongoing.
  • (2018): California. In this case, seven defendants have been charged with fraud for their roles in a massive “sham” telemedicine scheme that defrauded TRICARE out of an estimated $65 million. The defendants included a nurse practitioner, a physician and two chiropractors, among others. In this case, it was alleged that one or more individuals recruited and paid Marines and the defendants to fill prescriptions for specialty medications (filled by co-conspirator pharmacies) that resulted in fraudulent and / or tainted claims being submitted to TRICARE for payment. This case remains ongoing.
  • (2018): Florida. In this case, a Florida compounding pharmacy paid the government $350,000 to settle allegations that it violated the federal False Claims Act when it filled prescriptions that did not meet TRICARE’s telemedicine coverage requirements. When investigating the case, agents for the Defense Criminal Investigative Service (DCIS) found that pharmacy representatives made “unsolicited calls to TRICARE beneficiaries, provided medically unnecessary compound medications to beneficiaries, and knowingly filled prescriptions from doctors who did not meet or properly consult with TRICARE beneficiaries.”
  • (2017): Florida. In this case, a Florida compounding pharmacy and its owner agreed to pay the government $170,000 for violations of the federal False Claims Act. The government alleged that the defendants knowingly submitted claims to TRICARE for compounded medications that did not qualify for coverage and payment because they the prescriptions were not issued pursuant to a valid physician-patient relationship. Instead, the prescriptions were issued after brief calls were conducted between the prescribing physician and the TRICARE beneficiary. The telephone calls made did not meet applicable telehealth coverage requirements. Notably, prosecutors also alleged that the prescriptions for compounded medications were not medically necessary AND were tainted because of kickbacks paid to marketers.
  • (2016): Connecticut. In this case, a Connecticut psychiatrist and his practice were sued by a whistleblower under the federal Civil Claims Act for improper submitting telehealth claims to Medicare for payment. As the government found, the psychiatrist provided psychiatric services over the phone to Medicare beneficiaries that did not meet Medicare’s coverage requirements. More specifically, treating a patient over the phone does not meet Medicare’s requirements that the services be provided using an interactive audio and video communications system that permits real-time communications between the physician and the Medicare beneficiary. Additionally, the Medicare patients receiving the telehealth services did not live in a HPSA nor meet any of the other requirements under 42 C.F.R. § 410.78(b)(3) to properly qualify as an originating site. To resolve the false claims allegations, the defendants paid the government $36,704.
  • (2016): Florida. In this complex case, multiple defendants (including a physician, a physician’s assistant, a pharmacist, individuals working for a telemarketing company and related corporate entities) were convicted of various charges arising out of their improper submission of fraudulent, tainted prescription claims to TRICARE for payment and resulting in approximately $5.7 million in payments. The government alleged that the clinicians with prescribing authority were paid kickbacks by the defendant pharmacist to sign prescriptions made out to TRICARE beneficiaries. In addition to the kickback-tainted prescriptions, it is worth noting that there was no valid provider-patient relationship. Moreover, the prescriptions did not meet TRICARE’s telemedicine coverage requirements. A number of the defendants have plead guilty to the charges and are awaiting sentencing.

Conclusion:

As the Medicare requirements above reflect, telehealth services are subject to a number of restrictions. First and foremost, not all services qualify for payments as telehealth services under Medicare’s coverage rules. Assuming that the telehealth services to be provided do, in fact, qualify for coverage by Medicare, several additional requirements must be met. For example, the originating site where the Medicare beneficiary is located must qualify as an authorized geographic location. Is the region being served a rural area that has been designated as a HPSA? The specific location where the beneficiary will be receiving the services (such as a physician’s office) must also fit within Medicare’s narrow list of sites where a beneficiary can receive qualifying telehealth services. Additionally, the type of practitioner providing the services at the distant site qualify as an eligible provider type under Medicare’s rules. Eligible providers must also meet applicable State Practice Act requirements to provide telehealth services. For instance, several state legislatures have enacted rules that require practitioners providing telehealth services across state lines to also hold a valid state license where the patient is located. Finally, the telehealth services must be provided through the use of an appropriate interactive telecommunications system.

Are you providing telehealth services? If so, it is essential that you conduct a comprehensive review of the logistical, documentation, medical necessity, billing and coding requirements that must be met in order for the services to qualify for coverage and payment. Our attorneys can assist you with these efforts and / or represent you if your telehealth services are audited by Medicare, Medicaid or a private payor.

Robert W. Liles serves as Managing Partner at the health law firm, Liles Parker, Attorneys and Counselors at Law. Liles Parker attorneys represent health care providers and suppliers around the country in connection with UPIC audits, ZPIC audits, OIG audits and DOJ investigations of Medicare telehealth services. He also advises health care providers in connection with Medicaid and private payor audits of telehealth services. Are you currently being audited or under investigation? We can help. For a free initial consultation regarding your situation, call Robert at: 1 (800) 475-1906.
  • [1] Telehealth in Rural America, Policy Brief March 2015. National Advisory Committee on Rural Health and Human Services.
  • [2] During Calendar Year (CY) 2018, services that may qualify for coverage as telehealth services under Medicare include:
    Service HCPCS / CPT Code
    Telehealth consultations, emergency department or initial inpatient HCPCS codes G0425–G0427
    Follow-up inpatient telehealth consultations furnished to beneficiaries in hospitals or SNFs HCPCS codes G0406–G0408
    Office or other outpatient visits CPT codes 99201–99215
    Subsequent hospital care services, with the limitation of 1 telehealth visit every 3 days CPT codes 99231–99233
    Subsequent nursing facility care services, with the limitation of 1 telehealth visit every 30 days CPT codes 99307–99310
    Individual and group kidney disease education services HCPCS codes G0420 and G0421
    Individual and group diabetes self-management training services, with a minimum of 1 hour of in-person instruction to be furnished in the initial year training period to ensure effective injection training HCPCS codes G0108 and G0109
    Individual and group health and behavior assessment and intervention CPT codes 96150–96154
    Individual psychotherapy CPT codes 90832–90834 and 90836–90838
    Telehealth Pharmacologic Management HCPCS code G0459
    Psychiatric diagnostic interview examination CPT codes 90791 and 90792
    End-Stage Renal Disease (ESRD)-related services included in the monthly capitation payment CPT codes 90951, 90952, 90954, 90955, 90957, 90958, 90960, and 90961
    End-Stage Renal Disease (ESRD)-related services for home dialysis per full month, for patients younger than 2 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents CPT code 90963
    End-Stage Renal Disease (ESRD)-related services for home dialysis per full month, for patients 2-11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents CPT code 90964
    End-Stage Renal Disease (ESRD)-related services for home dialysis per full month, for patients 12-19 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents CPT code 90965
    End-Stage Renal Disease (ESRD)-related services for home dialysis per full month, for patients 20 years of age and older CPT code 90966
    End-Stage Renal Disease (ESRD)-related services for dialysis less than a full month of service, per day; for patients younger than 2 years of age (effective for services furnished on and after January 1, 2017) CPT code 90967
    End-Stage Renal Disease (ESRD)-related services for dialysis less than a full month of service, per day; for patients 2-11 years of age (effective for services furnished on and after January 1, 2017) CPT code 90968
    End-Stage Renal Disease (ESRD)-related services for dialysis less than a full month of service, per day; for patients 12-19 years of age (effective for services furnished on and after January 1, 2017) CPT code 90969
    End-Stage Renal Disease (ESRD)-related services for dialysis less than a full month of service, per day; for patients 20 years of age and older (effective for services furnished on and after January 1, 2017) CPT code 90970
    Individual and group medical nutrition therapy HCPCS code G0270 and CPT codes 97802–97804
    Neurobehavioral status examination CPT code 96116
    Smoking cessation services HCPCS codes G0436 and G0437 and CPT codes 99406 and 99407
    Alcohol and/or substance (other than tobacco) abuse structured assessment and intervention services HCPCS codes G0396 and G0397
    Annual alcohol misuse screening, 15 minutes HCPCS code G0442
    Brief face-to-face behavioral counseling for alcohol misuse, 15 minutes HCPCS code G0443
    Annual depression screening, 15 minutes HCPCS code G0444
    High-intensity behavioral counseling to prevent sexually transmitted infection; face-to-face, individual, includes: education, skills training and guidance on how to change sexual behavior; performed semi-annually, 30 minutes HCPCS code G0445
    Annual, face-to-face intensive behavioral therapy for cardiovascular disease, individual, 15 minutes HCPCS code G0446
    Face-to-face behavioral counseling for obesity, 15 minutes HCPCS code G0447
    Transitional care management services with moderate medical decision complexity (face-to-face visit within 14 days of discharge) CPT code 99495
    Transitional care management services with high medical decision complexity (face-to-face visit within 7 days of discharge) CPT code 99496
    Advance Care Planning, 30 minutes (effective for services furnished on and after January 1, 2017) CPT code 99497
    Advance Care Planning, additional 30 minutes (effective for services furnished on and after January 1, 2017) CPT code 99498
    Psychoanalysis CPT code 90845
    Family psychotherapy (without the patient present) CPT code 90846
    Family psychotherapy (conjoint psychotherapy) (with patient present) CPT code 90847
    Prolonged service in the office or other outpatient setting requiring direct patient contact beyond the usual service; first hour CPT code 99354
    Prolonged service in the office or other outpatient setting requiring direct patient contact beyond the usual service; each additional 30 minutes CPT code 99355
    Prolonged service in the inpatient or observation setting requiring unit/floor time beyond the usual service; first hour (list separately in addition to code for inpatient evaluation and management service) CPT code 99356
    Prolonged service in the inpatient or observation setting requiring unit/floor time beyond the usual service; each additional 30 minutes (list separately in addition to code for prolonged service) CPT code 99357
    Annual Wellness Visit, includes a personalized prevention plan of service (PPPS) first visit HCPCS code G0438
    Annual Wellness Visit, includes a personalized prevention plan of service (PPPS) subsequent visit HCPCS code G0439
    Telehealth Consultation, Critical Care, initial, physicians typically spend 60 minutes communicating with the patient and providers via telehealth (effective for services furnished on and after January 1, 2017) HCPCS code G0508
    Telehealth Consultation, Critical Care, subsequent, physicians typically spend 50 minutes communicating with the patient and providers via telehealth (effective for services furnished on and after January 1, 2017) HCPCS code G0509
    Counseling visit to discuss need for lung cancer screening using low dose CT scan (LDCT) (service is for eligibility determination and shared decision making (effective for services furnished on and after January 1, 2018) HCPCS code G0296
    Interactive Complexity Psychiatry Services and Procedures (effective for services furnished on and after January 1, 2018) CPT code 90785
    Health Risk Assessment (effective for services furnished on and after January 1, 2018) CPT codes 96160 and 96161
    Comprehensive assessment of and care planning for patients requiring chronic care management (effective for services furnished on and after January 1, 2018) HCPCS code G0506
    Psychotherapy for crisis (effective for services furnished on and after January 1, 2018) CPT codes 90839 and 90840

    For ESRD-related services, a physician, NP, PA, or CNS must furnish at least one “hands on” visit (not telehealth) each month to examine the vascular access site.

  • [3] Under 42 C.F.R. § 410.78(a)(3), the term “interactive telecommunications system” means:"[M]ultimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication between the patient and distant site physician or practitioner. Telephones, facsimile machines, and electronic mail systems do not meet the definition of an interactive telecommunications system." (emphasis added).
    Although the technologies described above do not qualify as interactive telecommunications systems, they still qualify as telehealth services (albeit non-covered telehealth services under Medicare).
  • [4] 42 C.F.R. § 483.40(c) services that may not be furnished by a physician as telehealth services include behavioral health related rehabilitation services such as physical therapy, speech-language pathology, occupational therapy, and rehabilitative services for mental disorders and intellectual disability, as required in a resident’s comprehensive plan of care.
  • [5] An originating site is the location of the qualified eligible Medicare patient when the telehealth service is furnished by a physician or practitioner at the distant site. Originating sites are paid a fee for hosting the telehealth service. In 2018, the fee paid to an originating site was $25.76. Please note, under the Bipartisan Budget Act of 2018, the originating site fee will be paid in certain circumstances.
  • [6] The definition of “store-and-forward” telehealth services varies from state to state. Generally, store-and-forward telehealth services are those where information, images, sound, video, etc., are stored or recorded and later forwarded to another site for clinical evaluation. In other words, it is not a real-time, live evaluation of a patient by a distant provider.
  • [7] Center for Connected Health Policy, “State Telehealth Laws & Reimbursement Policies.” (Fall 2018).
  • [8] A-05-16-00058 (April 2018).
  • [9] Ibid, page 5.
  • [10] Of the nearly $1 billion in claims submitted to payors for payment, only $174 million was ultimately paid by the payors. Nevertheless, federal prosecutors will likely argue that the face value of the claims billed (not necessary paid) is the amount that should be used when calculating the defendants’ potential period of imprisonment under the Sentencing Guidelines.