South Georgia Feds Target Telemedicine Fraud in Operation Rubber Stamp

The Federal Docket

October 7, 2020

On October 7, 2020, the DOJ and U.S. Attorney’s Office for the Southern District of Georgia announced several prosecutions of “telemedicine fraud” as a result of the federal government’s aggressive approach in Operation Rubber Stamp, including one case involving $1.5 billion in allegedly fraudulent bills to government health insurance programs. The feds allege that several individuals and companies involved in “telemedicine,” where patients can attend virtual appointments with their doctors, were collecting patient data and selling it to pharmacies, labs, and durable medical equipment (DME) suppliers. These “telemedicine executives” are accused of paying doctors and other healthcare providers to order unnecessary DME, lab tests, or prescription pain medication after brief telemedicine appoints or for patients they never actually saw, and bill the government for those allegedly unnecessary services. Hence, the rubber stamp.

As examples of the types of cases being brought, the DOJ points to Sherley Beaufils, a Georgia nurse now charged with federal wire fraud and healthcare fraud charges for ordering orthotic braces that the government contends were not medically necessary for patients. To make her actions seem more sinister, the DOJ emphasizes that the braces cost $3 million that was ultimately paid out by government insurance programs. The DOJ also singles out Toni De Lanoy, a compliance officer who is accused of processing more than $1 billion in orders for durable medical equipment that the government says was medically unnecessary. Others charged include telemedicine executives, licensed medical professionals, markets, and owners of DME, lab testing, and pharmaceutical companies. The DOJ states that over 30 people have already pleaded guilty.

Of course, the problems with these kinds of prosecutions is that the field of telemedicine is relatively new, and many healthcare practitioners are still learning about the regulations and rules they have to abide by. Telemedicine by nature is less intimate than a face-to-face medical appointment, so there can also be more room for discretion if a doctor thinks a treatment may be necessary or at least worth trying. There is no clear line stating how long doctors must examine their telemedicine patients or whether they need to take certain actions before recommending the patient for certain treatments or additional services. Additionally, doctors can often disagree over whether a particular treatment is necessary for a particular patient.  We should be skeptical of government lawyers claiming that medical services rendered or recommended by a doctor are “unnecessary.” The law regarding kickbacks can be vague too, as healthcare equipment companies or lab companies often promote their services or market their practices to doctors and providers and incentivize them to use their equipment or lab services. Not every incentive is a bribe or a kickback. As much as prosecutors hate to admit it, the truth is that there are often gray areas in these cases.

Federal prosecutions based on allegations of telemedicine fraud will only increase as the coronavirus pandemic continues, and even beyond, as we continue transitioning to a more virtual world. It is important for healthcare practitioners to understand the increased scrutiny that will come with the growth in telemedicine, and defense attorneys should take notice that the federal government will take a very aggressive approach that may ensnare innocent practitioners.

Click here to read the DOJ’s press release.

Our experienced federal healthcare fraud attorneys have prepared a primer to explain what happens if you or a client is charged with federal healthcare fraud charges.

Tom Church - Tom is a trial and appellate lawyer focusing on criminal defense and civil trials. Tom is the author of "The Federal Docket" and is a contributor to Mercer Law Review's Annual Survey in the areas of federal sentencing guidelines and criminal law. Tom graduated with honors from the University of Georgia Law School where he served as a research assistant to the faculty in the areas of constitutional law and civil rights litigation. Read Tom's reviews on AVVO. Follow Tom on Linkedin.

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