HHS OIG Directs Medicare Contractors to Scrutinize Telehealth Services Billing

The COVID-19 pandemic created a newfound need for expansive telehealth services. As lockdowns, restrictions, and mandates left many without in-person access to healthcare, providers shifted to telehealth services to provide the care their patients needed, providing telehealth care to over 28 million Medicare beneficiaries in the first year of the pandemic. The Centers for Medicare and Medicaid Services (CMS) recognized the need for telehealth services and temporarily paused many audits and other medical reviews of claims in order to expand telemedicine access to Medicare beneficiaries. The increased need for telehealth services caused by the pandemic also led CMS to increase the types of services available via telehealth from 118 to 264 services. Now, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) has produced a review of telehealth service claims from the first year of the pandemic in an attempt to identify fraud, waste, and abuse related to telehealth. This review attempts to identify providers that performed the most telehealth services, scrutinizes their billing, and forecasts an increase in Medicare audit activity for telehealth providers.

OIG analyzed Medicare fee-for-service claims data and Medicare Advantage data for the first year of the pandemic, spanning from March 1, 2020 – February 28, 2021. This review consisted of about 742,000 providers who billed for telehealth services. The investigation assessed providers for seven key measures that OIG identified as potential indications for fraud, waste, or abuse. The seven measures included providers that billed for: (1) both telehealth and facility fees for most visits; (2) telehealth services at the highest, most expensive level every time; (3) telehealth services for a high number of days a year; (4) Medicare fee-for-service and a Medicare Advantage plan for the same service for a high proportion of services; (5) a high average number of hours of telehealth services per visit; (6) telehealth services for a high number of beneficiaries; or (7) a telehealth service and ordering medical equipment for a high proportion of beneficiaries. While measures 1 and 4 address potential billing errors, the remaining 5 measures address providers that provide a higher-than-average number of telehealth services. In short, OIG’s review targets providers that performed the most telehealth services during the pandemic.

OIG assessed the providers and identified what it described as “high-risk” providers, or those that showed concerning billing in at least one of the seven measures. Despite reviewing over 742,000 providers, OIG only identified 1,714 (0.2%) providers as “high-risk,” all of which had billed for “a high number of beneficiaries” (about 500,000 beneficiaries). Of the 1,714 providers identified, 991 providers were a part of the same medical practice as at least one other “high-risk” provider. Many of these providers were deemed “high-risk” simply because they billed telehealth services for a high number of beneficiaries. OIG’s review suggests that telehealth companies will be closely watched for billing issues in the future.

The review also identified providers that performed more telehealth services than the average provider. OIG found 328 providers that billed for telehealth services for more than 300 days of the year, which resulted in $65 million in Medicare fee-for-service payments. The review also gave “high-risk” classifications to 67 providers that billed for telehealth services while also ordering durable medical equipment (DME) and supplies for at least half of their beneficiaries. The OIG’s “high-risk” classification of these providers forecasts greater scrutiny for DME audits in the future.

Beyond classifying providers that provided high amounts of telehealth services, OIG identified 672 providers that billed for both a facility fee (originating site fee) and a telehealth service for more than 75% of their telehealth visits, which resulted in a total of 148,000 double-billed visits for $14.3 million in facility fees and telehealth services. Of those 672 providers, OIG identified 57 providers that billed this way for all of their visits. OIG also identified 138 providers that billed both Medicare fee-for-service and a Medicare Advantage plan for the same telehealth services for more than 20% of their telehealth services. The report alleges that these providers may be intentionally submitting duplicate claims to increase Medicare payments.

Despite concluding that only 0.2% of Medicare providers were “high risk,” OIG recommended CMS increase audits of telehealth services. First, OIG instructs CMS and its contractors to closely monitor telehealth services to identify providers that pose a risk to the program, making a clear indication of stricter scrutiny in telehealth audits. Next, OIG directed CMS to conduct targeted reviews of the providers identified as “high-risk” in this review and to implement different enrollment application requirements to better identify telehealth companies which further foreshadows its intent to increase telehealth service audits. Finally, OIG acknowledged difficulties in reviewing telehealth billing due to a lack of “incident-to” billing code modifiers. In response, OIG suggests that CMS establish new code modifiers to better identify when providers other than the billing provider provide a telehealth service.

Overall, the OIG review showed that the vast majority of telehealth providers billed appropriately and are not a “high-risk” to Medicare, and of those providers deemed “high-risk,” most were flagged merely because they performed a high volume or proportion of telehealth services. Despite the small set of “high-risk” providers, OIG has instructed CMS to direct more resources to review telehealth services billing in the future. Consequently, it appears that CMS’s prime telehealth audit targets will be telehealth companies and DME suppliers.