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Legal Analysis: Seek counsel for business arrangements

Legal Analysis: Seek counsel for business arrangements

Q. I continue to hear about prosecutions by the Department of Justice of DME companies involved in telemedicine. What should I know?

A. Almost one year ago, the DOJ initiated prosecutions into one of the largest healthcare fraud cases in history that resulted in substantial losses and charges against numerous executives of telemedicine and DME companies. The schemes involved the payment of illegal kickbacks and bribes by DME companies in exchange for medical providers to refer Medicare beneficiaries for medically unnecessary braces (e.g. back, shoulder, wrist and knee braces). Specifically, providers were paid to prescribe DME either without any patient interaction or with only a brief conversation over the phone with patients they had never met. In addition, international call centers were used that would sell the orders to DME companies, which in turn fraudulently billed Medicare. To date, the prosecution of these types of schemes continues.

As recently as last month, an indictment was unsealed by DOJ against a Georgia-based telemedicine company in connection with soliciting and receiving illegal kickbacks and bribes from patient recruiters, pharmacies and brace suppliers in exchange for the arranging for providers to order medically unnecessary braces for beneficiaries of Medicare.

Given the DOJ's current focus on telemedicine and DME entities, increased enforcement is likely here to stay. Though a primary focus thus far has been on illegal kickbacks, it is possible that DOJ may expand its focus to other emerging DME practices. Thus, it is important to seek legal review for all proposed business arrangements with specialized healthcare counsel. 

Matthew Fischer is partner and health law attorney at Zumpano Patricios. Reach him at 305.444.5565 or [email protected]



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