Telemedicine: Striking the Balance Between Distancing and Dishonesty

By: Matthew Feibert

In one inconspicuous aspect, access to health care is no different than ordinary household items—it can be procured by using the internet.  This is done via telemedicine.  Specifically, telemedicine is the “practice of medicine using technology to deliver care at a distance.”[1]  In the majority of settings, telemedicine uses real-time digital face-to-face video-chatting to allow a health care professional to speak with and examine a patient.[2]  Instead of traveling to your doctor’s office and making the effort to avoid contracting an illness while sitting in the waiting room, telemedicine offers the benefit and ease of visiting your doctor from the comfort of your own home.  While telemedicine has steadily gained traction over the recent years, its use has skyrocketed since the arrival of COVID-19 in the United States.[3]  Though the use of telemedicine appears to be facially innocent, telemedicine is particularly vulnerable as it has been used as a vehicle to perpetuate health care fraud.[4]

Individuals have exploited the use of telemedicine for the purpose of enriching themselves.  The U.S Department of Justice has investigated and prosecuted egregious instances of health care fraud relating to the improper use of telemedicine.[5]  Unfortunately, telemedicine fraud schemes have resulted in the loss of staggering amounts of taxpayer dollars.

In 2019, Lester Stockett, the owner of numerous telemedicine companies, pleaded guilty to federal charges and admitted his role in a massive telemedicine fraud scheme.[6]  Over the course of the conspiracy, Stockett submitted or induced the submission of over $424 million in fraudulent claims to Medicare, over $200 million of which was paid and ultimately lined the pockets of the Stockett and his co-conspirators.[7] 

The companies that were used to perpetrate this fraud scheme were not nearby in geographic proximity.  Instead, the companies named in the indictment were registered and controlled in Florida, Wyoming, Delaware, and the Dominican Republic.[8]  This smattering of proximity between these companies demonstrates how the technological component of telemedicine allows for fraud schemes to be more far reaching and complex than ordinarily possible.  This case is only one illustration of the magnitude that telemedicine offers for those who seek to defraud the United States.

Today, although the medical community’s attention is currently focused on addressing the COVID-19 pandemic, the practice of medicine in non-COVID-19 areas must continue.  Yes, you can still become sick of an illness other than COVID-19.  In an effort to continue treating patients while simultaneously containing the spread of COVID-19 in the United States, health care providers of wide-ranging specialties have resorted to transitioning their office visits from an in-person interaction to now, a virtual interaction.[9]

On March 17, 2020, the Centers for Medicare & Medicaid Services (“CMS”) relaxed their ordinary reimbursement requirements for services performed via telemedicine.[10]  Using the “1135 waiver authority and the Coronavirus Preparedness and Response Supplemental Appropriations Act,” CMS expanded the use of telemedicine.[11]  “Prior to this waiver[,] Medicare could only pay for telehealth on a limited basis: when the person receiving the service is in a designated rural area” and in order to receive medical attention, they would need to travel a great distance.[12]  Now, among other rollbacks under the 1135 Waiver, CMS will reimburse for telemedicine services that a beneficiary receives, regardless of the geographic distance between their residence and treatment site.[13]

Given this relaxation in policy, CMS should expect to see an increase in fraudulent billing submissions relating to the use of telemedicine.  After all, it is the harsh reality in that even during times of crisis, the frequency of fraud schemes tend to experience an uptick.[14]  We can be rightfully disheartened, yet not be surprised to learn of telemedicine fraud schemes that have occurred so far during the COVID-19 pandemic.


[1]                What’s the Difference Between Telemedicine and Telehealth?, Am. Academy of Family Physicians, https://www.aafp.org/media-center/kits/telemedicine-and-telehealth.html (last visited Apr. 9, 2020).

[2]                Yolanda Smith, Types of Telemedicine, News Medical, https://www.news-medical.net/health/types-of-telemedicine.aspx (last updated Aug. 23, 2018).

[3]                Jeff Lagasse, Telemedicine is Poised to Grow as its Popularity Increases Among Physicians and Patients, Healthcare Finance (July 16, 2019), https://www.healthcarefinancenews.com/news/telemedicine-poised-grow-its-popularity-increases-among-physicians-and-patients.

[4]                Jackie Drees, 5 Things to Know About Telehealth Fraud, Becker’s Hospital Review (May 2, 2019), https://www.beckershospitalreview.com/telehealth/5-things-to-know-about-telehealth-fraud.html.

[5]                See, e.g., Two Owners of Telemedicine Companies Charged for Roles in $56 Million Conspiracy to Defraud Medicare and Receive Illegal Kickbacks in Exchange for Orders of Orthotic Braces, U.S. Dep’t Justice (Feb. 5, 2020), https://www.justice.gov/opa/pr/two-owners-telemedicine-companies-charged-roles-56-million-conspiracy-defraud-medicare-and.

[6]                Owner and Chief Executive Officer of Telemedicine Company Pleads Guilty to $424 Million Conspiracy to Defraud Medicare and Receive Illegal Kickbacks in Exchange for Orders of Durable Medical Equipment, U.S. Dep’t Justice (Sept. 6, 2019), https://www.justice.gov/opa/pr/owner-and-chief-executive-officer-telemedicine-company-pleads-424-million-conspiracy.

[7]                Id.

[8]                Id.

[9]                Medicare Telemedicine Health Care Provider Fact Sheet, Ctrs. for Medicare & Medicaid Servs. (Mar. 17, 2020), https://www.cms.gov/newsroom/fact-sheets/medicare-telemedicine-health-care-provider-fact-sheet.

[10]              See id.

[11]              Id.

[12]              Id.

[13]              Supra, note 9.

[14]              Greg Iacurci, Coronavirus Scams, Feeding off Investor Fears, Mimic Fraud From the 2008 Financial Crisis, CNBC (Mar. 21, 2020), https://www.cnbc.com/2020/03/20/coronavirus-scams-on-the-rise-mimic-fraud-in-2008-financial-crisis.html.