With the complexities and lockdowns of the COVID-19 pandemic, telehealth became essential in providing health care to millions of Americans. What was once a tool to connect rural patients to urban doctors, telehealth became a staple to help provide care for all patients. During COVID, to facilitate telehealth for more patients, federal and state regulators relaxed laws to allow more people easier access to this technology. For instance, Congress enacted telehealth waiver rules, which loosened Medicare coverage requirements by increasing the population eligible to receive telehealth treatments. The U.S. Centers for Medicare & Medicaid Services and many states also relaxed licensure requirements to allow doctors to provide telehealth services across state lines more easily.

Unfortunately, along with these more permissive regulations came the misuse of telehealth to facilitate fraud by certain bad actors. In July 2022, the Department of Health and Human Services (HHS) Office of the Inspector General issued a special fraud alert warning practitioners about fraud schemes relating to telehealth and the potential for these schemes to implicate the Federal Anti-Kickback Statute, False Claims Act and other federal laws. The alert highlighted a list of suspect characteristics to look out for when working with telehealth companies, including recruiting patients for free or low-cost items or services, compensating practitioners based on the number of prescriptions written, and offering only one type of product, among others.

On the same day that HHS issued its alert, the Department of Justice (DOJ) announced criminal actions against 36 defendants accused of $1.2 billion in fraudulent schemes involving telemedicine, cardiovascular and cancer genetic testing, and durable medical equipment. These schemes allegedly involved illegal kickbacks in exchange for referrals for unnecessary tests and medical equipment, which were made after a short virtual interaction with the patient or no patient contact at all.