Nurse Practitioner Pleads Guilty to DME, Telemedicine Fraud Scheme

A little more than a month after being charged in connection with a $7.8 million telemedicine fraud scheme involving medically unnecessary durable medical equipment (DME), a Virginia-based nurse practitioner has pleaded guilty to conspiracy to commit healthcare fraud.

Daphne Jenkins, 64, faces up to 10 years in prison, up to three years of supervised release and a fine of up to $250,000, or twice the gross financial gain or loss, whichever is greater.

The Durable Medical Equipment Scheme

Jenkins was charged in October in connection with a DME telemedicine fraud scheme that took place between December 2018 and April 2020. According to investigators, Jenkins worked with a telemedicine company to sign orders for medically unnecessary durable medical equipment including orthotics such as back and knee braces.

The orders she signed were based on telemarketing calls made to Medicare beneficiaries that she never had any contact with, had no medical relationship with and generally signed without even reading them.

As a result, more than $7.8 million in claims were submitted to Medicare for DME that was medically unnecessary, based on false documentation, and tainted by kickbacks.  

DME, Telemedicine Fraud on the Rise

The growth of telemedicine, although beneficial to many, also has resulted in an increase in fraudulent activity, particularly following the COVID-19 pandemic during which many patients and physicians turned to telemedicine for treatment.

We have written about numerous telemedicine fraud cases in which providers, telemedicine companies and unscrupulous marketers have conspired to engage in fraudulent activities resulting in millions of dollars in losses to Medicare, Medicaid, TRICARE and other insurers.

The most recent case involved an Orlando man and co-conspirators who were paid approximately $2.1 million and caused losses to Medicare and other payors of at least $3.6 million.

One of the largest crackdowns came in 2019 when the U.S. Department of Justice announced “Operation Brace Yourself” one of the largest Medicare fraud schemes in U.S. history. An international fraud ring allegedly bilked Medicare out of more than $1 billion by billing it for unnecessary DME, mostly back, shoulder, wrist, and knee braces.

HHS-OIG Issues Recommendations

In 2022, the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) issued a data brief outlining the unprecedented challenges facing Medicare beneficiaries in gaining access to healthcare during the COVID-19 pandemic. In response, DHS and the Centers for Medicare & Medicaid Services (CMS) took several steps to temporarily expand access to telehealth for Medicare beneficiaries. In addition, CMS temporarily paused several program integrity activities, including medical reviews of claims.

As a result of that temporary pause, the watchdog agency identified 1,714 providers whose billing for telehealth services during the first year of the pandemic posed a high risk to Medicare. Of those, 672 providers billed for both a facility fee and a telehealth service for

more than 75 percent of their telehealth visits. A provider should not bill for both the facility fee and a telehealth service for the same visit. In addition, more than 365 providers billed for certain telehealth services at the highest, most expensive level every time. The report goes on to outline other questionable billing practices resulting in a total of $127.7 million in Medicare fee-for-service payments.

The report made several recommendations to CMS:

• Strengthen monitoring and targeted oversight of telehealth services
• Provide additional education to providers on appropriate billing for telehealth services
• Improve the transparency of “incident to” services when clinical staff primarily delivered a telehealth service
• Identify telehealth companies that bill Medicare
• Follow up on the providers identified in its report

Common Elements of a Scheme

Also in 2022, the watchdog agency issued a special report outlining some of the ways these telemedicine fraud schemes work. One common element is the use of kickbacks by telemedicine companies to recruit and reward healthcare practitioners. In most instances, these telemedicine companies pay practitioners in exchange for ordering or prescribing items of services for patients with whom they have no interaction and without regard to medical necessity.

These payments are sometimes described as payment per review, audit, consult, or assessment of medical charts. The companies tell providers they don’t need to see the patients, just contact them by phone and are not even given the chance to review the patients’ medical record.

In addition, the telemedicine company may get the healthcare provider to order or prescribe a pre-selected item or service, regardless of medical necessity or clinical appropriateness. In many cases, those orders or prescriptions are sold to other individuals or entities that then fraudulently bill for the unnecessary items and services.

These telemedicine fraud schemes implicate several laws including the federal anti-kickback statute which prohibits knowingly and willfully soliciting or receiving (or offering or paying) any remuneration in return for (or to induce), among other things, referrals for, or orders of, items or services reimbursable by a federal healthcare program.

Practitioners who enter arrangements with telemedicine companies could face criminal, civil, or administrative liability depending on the facts and circumstances.

We can help

In some instances, healthcare providers participate in this type of fraud without knowing that they are being taken advantage of or that they are taking part in a crime. Before entering into any agreement, it’s imperative that you contact a qualified healthcare law attorney.

Our firm represents healthcare professionals in state and federal court who are charged with fraudulent billing, kickbacks, Medicare, Part D and Medicaid fraud and false claims, among others. Our team of highly skilled attorneys and consultants are here to help you before you become the focus of an investigation and will aggressively defend you should you become the target of one.