Telemedicine is a new mode of delivery of care and is ripe for fraud opportunities, but the Department of Justice appears to be on top of potential schemes. The DOJ indicted four men  with a multi-state telemedicine scheme that billed at least $931 million in fraudulent claims to private insurances according to the Department of Justice.

Telemedicine Fraud

The 32-count indictment was filed in US District Court in Greeneville, Tennessee. The four defendants are owners of seven compounding pharmacies in Florida and Texas. They set up an elaborate scheme using telemedicine that solicited insurance and prescription drug information from consumers from all over the country.

Physicians were used by the owners of the seven compounding pharmacies to unwittingly approve prescriptions for “pain creams” and other drugs without even knowing that the pharmacies were increasing the prices of these improperly prescribed drugs which ere directly billed to private payers.

Patients were solicited over the phone for “pain creams” and when they were interested, their demographics and insurance information was captured by the solicitors of the compound pharmacies. The patients’ complaints and problems were also documented over the phone by the “telemarketers” from the compound pharmacies, which went to the physicians to prescribe the “pain creams”.

The four defendants were each charged with conspiracy to commit healthcare fraud, mail fraud and introducing misbranded drugs into interstate commerce. Luckily for the physicians who were drawn into the conspiracy by the compounding pharmacies, they were not charged with any part of the conspiracy fraud. If convicted, the four men face prison terms of up to 20 years for each mail fraud charge, up to 10 years for conspiracy and up to three years for introducing misbranded drugs into interstate commerce. The indictment is also looking to get $154 million forfeited by the defendants as well.