The U.S. Department of Justice announced this past Friday that it had charged four people, one of whom is a licensed physician, in an international telehealth fraud and kickback scheme.

According to the indictment, starting in May 2014, the defendants and their co-conspirators allegedly used telehealth to generate prescriptions for compounded medications and durable medical equipment, regardless of medical necessity.

"The defendants caused losses to Tricare, Medicare and private health insurance companies of approximately $37 million," wrote DOJ officials in a press release.

WHY IT MATTERS

At the time of the alleged fraud, three of the defendants – David Woroboff, George Willard and Randall Mills – were high-level employees of a telemedicine company.

Although the DOJ does not name the company, Woroboff and Willard both list 24/7 Call-A-Doc as their employer on their LinkedIn profiles. Mills, meanwhile, bills himself on LinkedIn as the CEO at a company called 24 Hour Physicians.

According to the DOJ, the defendants are accused of arranging for healthcare providers associated with the telemedicine company to write prescriptions for medications and medical equipment without the establishment of any provider-patient relationship, in exchange for kickbacks and in violation of some state telehealth laws.

Woroboff, Willard and Mills allegedly agreed to pay Massachusetts-based physician Dr. Le Thu, who is also charged in the indictment, about $35 per prescription.

"In order to encourage providers to write prescriptions without establishing a provider-patient relationship, Woroboff and Mills falsely informed providers that 'nurses' had already consulted with the patients, taken their medical histories, and determined that compounded medication or DME [durable medical equipment] was medically appropriate," wrote the DOJ in a press release.

"In reality, the 'nurses' were located in the Philippines, were not registered to practice medicine in the United States and generally had not spoken with the patients," said the DOJ release. 

The agency said that patient information had been provided by marketing companies.

THE LARGER TREND

The federal government has cracked down on telehealth fraud, most recently announcing in September that it had brought charges against more than 43 people in 11 judicial districts for more than $1.1 billion in schemes relating to telemedicine.

Earlier this year, a Florida woman was also ordered to pay $20.3 million in a case the DOJ described as one of the "largest healthcare fraud schemes in United States history."

ON THE RECORD

"The charge of conspiracy to commit healthcare fraud is punishable by a maximum potential penalty of 10 years in prison," said the DOJ in a press release regarding the most recent indictment.

"The charge of conspiracy to violate the federal Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison. The maximum fine for each count is $250,000, or twice the gross profit or loss caused by the offense, whichever is greatest," it continued.