How changes in Medicaid reimbursements has opened the gates to telehealth fraud

SALT LAKE CITY — Call it telehealth, telemedicine or even eHealth, online visits with doctors, nurses and other healthcare professionals exploded in popularity during the pandemic.

Unfortunately, the side effect is a new and booming revenue stream for fraudsters.

Telehealth emerged quickly during the pandemic as a necessity for so many Medicaid and Medicare patients that the government and insurers relaxed reimbursement requirements for providers. But experts said that happened without beefing up safeguards, and it opened the floodgates for fraudsters.

Before COVID-19 struck, Medicaid and Medicare only reimbursed providers on many tests and procedures for in-person visits.

Telehealth visits weren’t acceptable back then, but they are now, and the bad guys have caught on fast.

“It created a huge opportunity for fraudulent activity,” said Haywood Talcove, the CEO of LexisNexis Risk Solution’s government division.

Talcove’s group has been digging into Medicaid billing records, and in numbers shared with the KSL Investigators, they showed $4.5 billion in taxpayer money has already been pocketed in fraudulent telehealth schemes.

Talcove believes that number will climb much higher.

And officials with the Utah Department of Health confirmed it is an issue in Utah, telling the KSL Investigators in a statement, “We follow the national trends.”

“You saw just a huge uptick in the use of stolen information to perpetrate fraudulent activity by providing services that were never provided,” said Talcove.

He explained the crooks use stolen identities of both providers and patients, living and deceased, to bill Medicaid for countless hours of telehealth visits that happen only on bogus paperwork.

Some schemes are difficult to detect, others are much easier.

“That person’s working 23 hours a day, doing eight appointments an hour and not even taking a break! What a dedicated provider!” he said sardonically.

Besides their identities being used, patients could face denials of benefits down the road.

“You could find yourself in ‘Medicaid prison’ because it’s going to appear that you’re getting service inappropriately and not following the rules,” Talcove said. “You’re on Medicaid. You need health care services, and you can’t get them, right? Because someone stole your identity and used it inappropriately.”

The solution?

Talcove said Medicaid agencies should consult with businesses in the private sector and see how they are detecting fraud.

“The fraud patterns are very familiar to places like Amazon, Target, the credit card companies – there’s no surprise there,” he said.

He also pushed those agencies to enhance their data and analytic systems, so they are working virtually full-time.

“It doesn’t do any good to let a provider bill for three months and realize it was fraudulent and you just paid out $5 million,” Talcove said, who also recommended Medicaid agencies adopt identity validation from a third party, so they are not relying solely on information given by providers or patients that could be fraudulent.

For its part, UDOH told KSL, “We are working with Centers for Medicare and Medicare Services’ Center for Program Integrity, the U.S. Department of Health and Human Services’ Office of Inspector General and other states’ Program Integrity Units to ensure we stay on top of any emerging fraud trends.”

As for consumers, another telehealth scam has fraudulent providers calling people to convince them they’ve got COVID-19 and should visit a medical professional online.

They’ll ask for personal information that will end up in the hands of crooks.

That is a call you should hang up on.