[Federal Register Volume 87, Number 162 (Tuesday, August 23, 2022)]
[Notices]
[Pages 51683-51687]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18063]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Inspector General


Publication of OIG Special Fraud Alerts

AGENCY: Office of Inspector General (OIG), HHS.

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ACTION: Notice.

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SUMMARY: This Federal Register notice sets forth two Special Fraud 
Alerts previously published by OIG on its website. We are publishing 
these Special Fraud Alerts in the Federal Register to ensure widespread 
dissemination of the Special Fraud Alerts to the general public and to 
satisfy the Federal Register publication requirement.

FOR FURTHER INFORMATION CONTACT: Katie Fink, Karen Glassman, or 
Benjamin Wallfisch, (202) 619-0335.

I. Background

    Pursuant to 42 U.S.C. 1320a-7d(c), OIG periodically issues Special 
Fraud Alerts to give continuing guidance to health care industry 
stakeholders regarding practices OIG considers to be suspect or of 
particular concern. Special Fraud Alerts encourage industry compliance 
by giving stakeholders guidance that can be applied to their own 
practices. In developing Special Fraud Alerts, OIG relies on several 
sources and consults directly with experts in the subject field 
including those within OIG, other HHS agencies, other Federal and State 
agencies, and in the health care industry.
    To ensure widespread dissemination of this information to the 
general public and to satisfy the Federal Register publication 
requirement found in 42 U.S.C. 1320a-7d(c)(1)(B), OIG is republishing 
two Special Fraud Alerts--in their entirety--below. These Special Fraud 
Alerts are: (1) Special Fraud Alert: Speaker Programs, which was 
originally published on OIG's website on November 16, 2020; and (2) 
Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution When 
Entering Into Arrangements With Purported Telemedicine Companies, which 
was originally published on OIG's website on July 20, 2022.

II. Special Fraud Alert: Speaker Programs

I. Introduction

    This Special Fraud Alert highlights the fraud and abuse risks 
associated with the offer, payment, solicitation, or receipt of 
remuneration relating to speaker programs by pharmaceutical and medical 
device companies. For purposes of this Special Fraud Alert, speaker 
programs are generally defined as company-sponsored events at which a 
physician or other health care professional (collectively, ``HCP'') 
makes a speech or presentation to other HCPs about a drug or device 
product or a disease state on behalf of the company. The company 
generally pays the speaker HCP an honorarium, and often pays 
remuneration (for example, free meals) to the attendees. In the last 
three years, drug and device companies have reported paying nearly $2 
billion to HCPs for speaker-related services.\1\
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    \1\ Drug and device companies are required to report certain 
payments made to HCPs to the Centers for Medicare & Medicaid 
Services (CMS). CMS makes this information publicly available on its 
Open Payments website. According to Open Payments, drug and device 
companies paid HCPs nearly $2 billion under the category 
``compensation for services other than consulting, including serving 
as faculty or as a speaker at a venue other than a continuing 
education program'' for years 2017, 2018, and 2019 combined. Open 
Payments Complete 2017, 2018, and 2019 Program Year Datasets, CMS, 
https://www.cms.gov/OpenPayments/Explore-the-Data/Data-Overview 
(accessed Sept. 9, 2020).
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    The Office of Inspector General (OIG) and Department of Justice 
(DOJ) have investigated and resolved numerous fraud cases involving 
allegations that remuneration offered and paid in connection with 
speaker programs violated the anti-kickback statute. The Federal 
government has pursued civil and criminal cases against companies and 
individual HCPs involving speaker programs. These cases alleged, for 
example, that drug and device companies:
     selected high-prescribing HCPs to be speakers and rewarded 
them with lucrative speaker deals (e.g., some HCPs received hundreds of 
thousands of dollars for speaking); \2\
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    \2\ Though not addressed in this Special Fraud Alert, 
remuneration paid by drug and device companies relating to the 
training of HCP speakers also may raise fraud and abuse risks.
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     conditioned speaker remuneration on sales targets (e.g., 
required speaker HCPs to write a minimum number of prescriptions in 
order to receive the speaker honoraria);
     held speaker programs at entertainment venues or during 
recreational events or otherwise in a manner not conducive to an 
educational presentation (e.g., wineries, sports stadiums, fishing 
trips, golf clubs, and adult entertainment facilities);
     held programs at high-end restaurants where expensive 
meals and alcohol were served (e.g., in one case, the average food and 
alcohol cost per attendee was over $500); and
     invited an audience of HCP attendees who had previously 
attended the same program or HCPs' friends, significant others, or 
family members who did not have a legitimate business reason to attend 
the program.
    Our enforcement experience demonstrates that some companies expend 
significant resources on speaker programs and that some HCPs receive 
substantial remuneration from companies. This Special Fraud Alert 
highlights some of the inherent fraud and abuse risks associated with 
the offer, payment, solicitation, or receipt of remuneration related to 
company-sponsored speaker programs.

II. The Anti-Kickback Statute

    Congress enacted the anti-kickback statute, in part, to protect 
patients from referrals or recommendations by HCPs who may be 
influenced by inappropriate financial incentives. The anti-kickback 
statute makes it a criminal offense to knowingly and willfully solicit, 
receive, offer, or pay any remuneration to induce or reward, among 
other things, referrals for, or orders of, items or services 
reimbursable by a Federal health care program.\3\ When remuneration is 
paid purposefully to induce or reward referrals of items or services 
payable by a Federal health care program, the anti-kickback statute is 
violated. For purposes of the anti-kickback statute, the offer, 
payment, solicitation, or receipt of ``remuneration'' includes the 
transfer of anything of value, directly or indirectly, overtly or 
covertly, in cash or in kind. By its terms, the statute ascribes 
criminal liability to all parties to an impermissible ``kickback'' 
transaction (i.e., those who solicit or receive prohibited remuneration 
as well as those who offer or pay the prohibited remuneration). 
Violation of the statute is a felony punishable by a maximum fine of 
$100,000, imprisonment up to 10 years, or both. Criminal conviction 
will also lead to mandatory exclusion from Federal health care 
programs, including Medicare and Medicaid.\4\ OIG may also initiate 
administrative proceedings to exclude persons from the Federal health 
care programs and impose civil money penalties for conduct prohibited 
by the anti-kickback statute.\5\
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    \3\ See section 1128B(b)(1)-(2) of the Social Security Act; 42 
U.S.C. 1320a-7b(b)(1)-(2). The anti-kickback statute applies broadly 
to remuneration to induce or reward referrals of patients as well as 
the payment of remuneration intended to induce or reward the 
purchasing, leasing, or ordering of, or arranging for or 
recommending the purchasing, leasing, or ordering of, any item or 
service reimbursable by any Federal health care program. In this 
Special Fraud Alert, we use the term ``referral'' to include the 
full range of these types of activities (including ordering or 
prescribing items) that falls within the scope of the anti-kickback 
statute.
    \4\ See 42 U.S.C. 1320a-7(a).
    \5\ See 42 U.S.C. 1320a-7(b)(7); 1320a-7a(a)(7).
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III. Fraud and Abuse Risks of Speaker Programs

    Numerous investigations have involved allegations that drug and 
device companies organize and pay for speaker programs with the intent 
to

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induce HCPs to prescribe or order (or recommend the prescription or 
ordering of) the companies' products. Speaker programs typically 
involve an HCP who is not an employee of the company speaking in person 
to other HCPs about a company product or disease state using a 
presentation developed and approved by the company. According to a 
pharmaceutical industry trade group, HCPs ``participate in company-
sponsored speaker programs in order to help educate and inform other 
health care professionals about the benefits, risks, and appropriate 
uses of company medicines.'' \6\
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    \6\ Code on Interactions with Health Care Professionals, PhRMA, 
7 (June 2020), available at https://phrma.org/Codes-and-guidelines/Code-on-Interactions-with-Health-Care-Professionals. A device 
industry trade group also addresses this topic and interactions with 
HCPs generally in its code of ethics. See AdvaMed Code of Ethics, 
AdvaMed (July 2020), available at https://www.advamed.org/resource-center/advamed-code-ethics-2020.
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    OIG is skeptical about the educational value of such programs. Our 
investigations have revealed that, often, HCPs receive generous 
compensation to speak at programs offered under circumstances that are 
not conducive to learning or to speak to audience members who have no 
legitimate reason to attend. Such cases strongly suggest that one 
purpose of the remuneration to the HCP speaker and attendees is to 
induce or reward referrals. Furthermore, studies have shown that HCPs 
who receive remuneration from a company are more likely to prescribe or 
order that company's products.\7\ This remuneration to HCPs may skew 
their clinical decision making in favor of their own and the company's 
financial interests, rather than the patient's best interests.
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    \7\ Amarnath Annapureddy et al., Association Between Industry 
Payments to Physicians and Device Selection in ICD Implantation, 324 
JAMA 17, 2020, at 1759, 1762-63; William Fleischman et al., 
Association between payments from manufacturers of pharmaceuticals 
to physicians and regional prescribing: cross sectional ecological 
study, 354 BMJ i4189, 2016, at 1, 4-7; James P. Orlowski & Leon 
Wateska, The effects of pharmaceutical firm enticements on physician 
prescribing patterns. There's no such thing as a free lunch., 102 
Chest, 1992, 270.
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    There are many other ways for HCPs to obtain information about drug 
and device products and disease states that do not involve remuneration 
to HCPs. HCPs can access the same or similar information provided in a 
speaker program using various online resources, the product's package 
insert, third-party educational conferences, medical journals, and 
more. The availability of this information through means that do not 
involve remuneration to HCPs further suggests that at least one purpose 
of remuneration associated with speaker programs is often to induce or 
reward referrals.
    Parties involved in speaker programs may be subject to increased 
scrutiny. These include any drug or device company that organizes or 
pays remuneration associated with the program, any HCP who is paid to 
speak, and any HCP attendees who receive remuneration from the company 
(e.g., free food and drink). OIG has long expressed concerns over the 
practice of drug and device companies providing anything of value to 
HCPs in a position to make or influence referrals to such companies' 
products. In the 2003 OIG Compliance Program Guidance for 
Pharmaceutical Manufacturers,\8\ OIG identified manufacturer 
compensation relationships with physicians connected directly or 
indirectly to marketing and sales activities, including speaking 
activities, as an area of potential risk under the anti-kickback 
statute. OIG noted that when a drug or device company engages in 
``entertainment, recreation, travel, meals or other benefits in 
association with information or marketing presentations,'' such 
arrangements may potentially implicate the anti-kickback statute.\9\
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    \8\ OIG Compliance Program Guidance for Pharmaceutical 
Manufacturers, 68 FR 23731 (May 5, 2003), available at https://oig.hhs.gov/authorities/docs/03/050503FRCPGPharmac.pdf. The guidance 
is not limited to pharmaceutical manufacturers; it states, ``the 
compliance program elements and potential risk areas addressed in 
this compliance program guidance may also have application to 
manufacturers of other products that may be reimbursed by [F]ederal 
health care programs, such as medical devices and infant nutritional 
products.'' Id. at 23742, n.5.
    \9\ Id. at 23738.
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    OIG also warned physicians that a consultant or speaking 
arrangement with a drug or device company could be an improper 
inducement ``to prescribe or use [company] products on the basis of . . 
. loyalty to the company or to get more money from the company, rather 
than because it is the best treatment for the patient.'' \10\ OIG 
recommended that physicians consider the propriety of any proposed 
relationship with a company and advised that if the basis for a 
physician's compensation ``is your ability to prescribe a drug or use a 
medical device or refer your patients for particular services or 
supplies, the proposed consulting arrangement likely is one you should 
avoid as it could violate fraud and abuse laws.'' \11\ Again, we note 
that HCPs could face liability under the anti-kickback statute for 
knowingly and willfully soliciting or receiving remuneration in 
connection with speaker programs in return for prescribing or ordering 
products reimbursable by a Federal health care program.
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    \10\ A Roadmap for New Physicians, Avoiding Medicare and 
Medicaid Fraud and Abuse, HHS-OIG, 22 (Nov. 2010), available at 
https://oig.hhs.gov/compliance/physician-education/roadmap_web_version.pdf; OIG Compliance Program for Individual and 
Small Group Physician Practices, 65 FR 59434 (Oct. 5, 2000), 
available at https://oig.hhs.gov/authorities/docs/physician.pdf.
    \11\ Id. at 23.
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    OIG recognizes that the lawfulness of any remunerative arrangement, 
including speaker program arrangements, under the anti-kickback statute 
depends on the facts and circumstances and intent of the parties. Such 
intent may be evidenced by the speaker program's characteristics and 
the actual conduct of the parties involved. Below we describe some 
characteristics, which, taken separately or together, potentially 
indicate a speaker program arrangement that could violate the anti-
kickback statute. As previously stated, drug and device companies that 
host or pay for such speaker programs and HCPs who speak at or attend 
such programs could be liable under the anti-kickback statute for any 
prohibited remuneration. This list of suspect characteristics is 
illustrative, not exhaustive, and the presence or absence of any one of 
these factors is not determinative of whether a particular arrangement 
would be suspect under the anti-kickback statute.
     The company sponsors speaker programs where little or no 
substantive information is actually presented;
     Alcohol is available or a meal exceeding modest value is 
provided to the attendees of the program (the concern is heightened 
when the alcohol is free);
     The program is held at a location that is not conducive to 
the exchange of educational information (e.g., restaurants or 
entertainment or sports venues);
     The company sponsors a large number of programs on the 
same or substantially the same topic or product, especially in 
situations involving no recent substantive change in relevant 
information;
     There has been a significant period of time with no new 
medical or scientific information nor a new FDA-approved or cleared 
indication for the product;
     HCPs attend programs on the same or substantially the same 
topics more than once (as either a repeat attendee or as an attendee 
after being a speaker on the same or substantially the same topic);
     Attendees include individuals who don't have a legitimate 
business reason

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to attend the program, including, for example, friends, significant 
others, or family members of the speaker or HCP attendee; employees or 
medical professionals who are members of the speaker's own medical 
practice; staff of facilities for which the speaker is a medical 
director; and other individuals with no use for the information;
     The company's sales or marketing business units influence 
the selection of speakers or the company selects HCP speakers or 
attendees based on past or expected revenue that the speakers or 
attendees have or will generate by prescribing or ordering the 
company's product(s) (e.g., a return on investment analysis is 
considered in identifying participants);
     The company pays HCP speakers more than fair market value 
for the speaking service or pays compensation that takes into account 
the volume or value of past business generated or potential future 
business generated by the HCPs.

IV. Conclusion

    OIG has significant concerns about companies offering or paying 
remuneration (and HCPs soliciting or receiving remuneration) in 
connection with speaker programs. Based on our investigations and 
enforcement actions, this remuneration is often offered or paid to 
induce (or solicited or received in return for) ordering or prescribing 
items paid for by Federal health care programs. If the requisite intent 
is present, both the company and the HCPs may be subject to criminal, 
civil, and administrative enforcement actions. This Special Fraud Alert 
is not intended to discourage meaningful HCP training and education. 
Rather, the purpose of this Special Fraud Alert is to highlight certain 
inherent risks of remuneration related to speaker programs. Drug and 
device companies and HCPs should consider the risks when assessing 
whether to offer, pay, solicit, or receive remuneration related to 
speaker programs.
    We are issuing this alert during the pandemic emergency, which is 
necessarily curtailing many in-person activities. While companies may 
have decreased in-person speaker program-related remuneration to HCPs 
during the pandemic, risks remain whenever payments are offered or made 
to HCPs who generate Federal health care program business for the 
company. The risks associated with speaker programs will become more 
pronounced if companies resume in-person speaker programs or increase 
speaker program-related remuneration to HCPs. Companies should assess 
the need for in-person programs given the risks associated with 
offering or paying related remuneration and consider alternative less-
risky means for conveying information to HCPs. HCPs should likewise 
consider the risks of soliciting or receiving remuneration related to 
speaker programs given other available means to gather information 
relevant to providing appropriate treatment for patients. If a company 
or HCP has questions about a specific speaker program arrangement 
involving remuneration to referral sources, the OIG Advisory Opinion 
process remains available. Information about that process may be found 
at: https://oig.hhs.gov/faqs/advisory-opinions-faq.asp.

III. Special Fraud Alert: OIG Alerts Practitioners To Exercise Caution 
When Entering Into Arrangements With Purported Telemedicine Companies

I. Introduction

    The Office of Inspector General (OIG) has conducted dozens of 
investigations of fraud schemes involving companies that purported to 
provide telehealth, telemedicine, or telemarketing services 
(collectively, Telemedicine Companies) and exploited the growing 
acceptance and use of telehealth. For example, in some of these fraud 
schemes Telemedicine Companies intentionally paid physicians and 
nonphysician practitioners (collectively, Practitioners) kickbacks to 
generate orders or prescriptions for medically unnecessary durable 
medical equipment, genetic testing, wound care items, or prescription 
medications, resulting in submissions of fraudulent claims to Medicare, 
Medicaid, and other Federal health care programs. These fraud schemes 
vary in design and operation, and they have involved a wide range of 
different individuals and types of entities, including international 
and domestic telemarketing call centers, staffing companies, 
Practitioners, marketers, brokers, and others.
    One common element of these schemes is the way Telemedicine 
Companies have used kickbacks to aggressively recruit and reward 
Practitioners to further the fraud schemes. Generally, the Telemedicine 
Companies arrange with Practitioners to order or prescribe medically 
unnecessary items and services for individuals (referred to here as 
``purported patients'') who are solicited and recruited by Telemedicine 
Companies. In many of these arrangements, Telemedicine Companies pay 
Practitioners in exchange for ordering or prescribing items or 
services: (1) for purported patients with whom the Practitioners have 
limited, if any, interaction; and (2) without regard to medical 
necessity. Such payments are sometimes described as payment per review, 
audit, consult, or assessment of medical charts. Telemedicine Companies 
often tell Practitioners that they do not need to contact the purported 
patient or that they only need speak to the purported patient by 
telephone. In addition, Practitioners are not given an opportunity to 
review the purported patient's real medical records. Furthermore, the 
Telemedicine Company may direct Practitioners to order or prescribe a 
preselected item or service, regardless of medical necessity or 
clinical appropriateness. In many cases, the Telemedicine Company sells 
the order or prescription generated by Practitioners to other 
individuals or entities that then fraudulently bill for the unnecessary 
items and services.
    These schemes raise fraud concerns because of the potential for 
considerable harm to Federal health care programs and their 
beneficiaries, which may include: (1) an inappropriate increase in 
costs to Federal health care programs for medically unnecessary items 
and services and, in some instances, items and services a beneficiary 
never receives; (2) potential to harm beneficiaries by, for example, 
providing medically unnecessary care, items that could harm a patient, 
or improperly delaying needed care; and (3) corruption of medical 
decision-making.
    OIG encourages Practitioners to exercise caution and use heightened 
scrutiny when entering into arrangements with Telemedicine Companies 
that have one or more of the suspect characteristics described below. 
This Special Fraud Alert provides information to help Practitioners 
identify potentially suspect arrangements with Telemedicine Companies.

II. Multiple Federal Laws Implicated

    The schemes described above may implicate multiple Federal laws, 
including the Federal anti kickback statute. The Federal anti-kickback 
statute is a criminal law that prohibits knowingly and willfully 
soliciting or receiving (or offering or paying) any remuneration in 
return for (or to induce), among other things, referrals for, or orders 
of, items or services reimbursable by a Federal health care program. 
One purpose of the Federal anti-kickback statute is to protect patients 
from improper medical referrals or recommendations by health care 
professionals and others who may be influenced by financial incentives.

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When a party knowingly and willfully pays remuneration to induce or 
reward referrals of items or services payable by a Federal health care 
program, the Federal anti-kickback statute is violated. By its terms, 
the statute ascribes liability to parties on both sides of an 
impermissible kickback transaction. Practitioner arrangements with 
Telemedicine Companies may also lead to criminal, civil, or 
administrative liability under other Federal laws including, for 
example, OIG's exclusion authority related to kickbacks, the Civil 
Monetary Penalties Law provision for kickbacks, the criminal health 
care fraud statute, and the False Claims Act. Practitioners may be 
personally liable for these types of arrangements, including for 
submitting or causing the submission of claims if they are involved in 
ordering or prescribing medically unnecessary items or services.

III. Recent Enforcement Experience

    In recent years, OIG and the Department of Justice (DOJ) have 
investigated numerous criminal, civil, and administrative fraud cases 
involving kickbacks from Telemedicine Companies to Practitioners who 
inappropriately ordered or prescribed items or services reimbursable by 
Federal health care programs in exchange for remuneration. In those 
cases, Practitioners, Telemedicine Companies, and other participants in 
schemes have been held civilly, criminally, and administratively liable 
for: (1) paying or receiving a payment in violation of the Federal 
anti-kickback statute, (2) causing a submission of claims in violation 
of the False Claims Act, and/or (3) other Federal criminal laws.
    While the facts and circumstances of each case differed, often they 
involved at least one Practitioner ordering or prescribing items or 
services for purported patients they never examined or meaningfully 
assessed to determine the medical necessity of items or services 
ordered or prescribed. In addition, Telemedicine Companies commonly 
paid Practitioners a fee that correlated with the volume of federally 
reimbursable items or services ordered or prescribed by the 
Practitioners, which was intended to and did incentivize a Practitioner 
to order medically unnecessary items or services. These types of 
volume-based fees not only implicate and potentially violate the 
Federal anti-kickback statute, but they also may corrupt medical 
decision-making, drive inappropriate utilization, and result in patient 
harm.

IV. Suspect Characteristics

    Based on OIG's and DOJ's enforcement experience, we have developed 
the below list of suspect characteristics related to Practitioner 
arrangements with Telemedicine Companies which, taken together or 
separately, could suggest an arrangement that presents a heightened 
risk of fraud and abuse. This list is illustrative, not exhaustive, and 
the presence or absence of any one of these factors is not 
determinative of whether a particular arrangement with a Telemedicine 
Company would be grounds for legal sanctions.
     The purported patients for whom the Practitioner orders or 
prescribes items or services were identified or recruited by the 
Telemedicine Company, telemarketing company, sales agent, recruiter, 
call center, health fair, and/or through internet, television, or 
social media advertising for free or low out-of-pocket cost items or 
services.
     The Practitioner does not have sufficient contact with or 
information from the purported patient to meaningfully assess the 
medical necessity of the items or services ordered or prescribed.
     The Telemedicine Company compensates the Practitioner 
based on the volume of items or services ordered or prescribed, which 
may be characterized to the Practitioner as compensation based on the 
number of purported medical records that the Practitioner reviewed.
     The Telemedicine Company only furnishes items and services 
to Federal health care program beneficiaries and does not accept 
insurance from any other payor.
     The Telemedicine Company claims to only furnish items and 
services to individuals who are not Federal health care program 
beneficiaries but may in fact bill Federal health care programs.
     The Telemedicine Company only furnishes one product or a 
single class of products (e.g., durable medical equipment, genetic 
testing, diabetic supplies, or various prescription creams), 
potentially restricting a Practitioner's treating options to a 
predetermined course of treatment.
     The Telemedicine Company does not expect Practitioners (or 
another Practitioner) to follow up with purported patients nor does it 
provide Practitioners with the information required to follow up with 
purported patients (e.g., the Telemedicine Company does not require 
Practitioners to discuss genetic testing results with each purported 
patient).
    Practitioners who enter into arrangements with Telemedicine 
Companies in which one or more of these suspect characteristics are 
present should exercise care and may face criminal, civil, or 
administrative liability depending on the facts and circumstances. This 
Special Fraud Alert is not intended to discourage legitimate telehealth 
arrangements. For example, OIG is aware that many Practitioners have 
appropriately used telehealth services during the current public health 
emergency to provide medically necessary care to their patients. 
However, OIG encourages Practitioners to use heightened scrutiny, 
exercise caution, and consider the above list of suspect criteria prior 
to entering into arrangements with Telemedicine Companies. This Special 
Fraud Alert does not alter any person's obligations under any 
applicable statutes or regulations, including those governing the 
billing or submission of Federal health care program claims.
    For more information on telehealth-related issues, please visit our 
website, which includes additional materials relating to the provision 
of telehealth. If you have information about Practitioners, 
Telemedicine Companies, or other individuals or entities engaging in 
any of the activities described above, please contact the OIG Hotline 
at https://oig.hhs.gov/fraud/report-fraud or by phone at 1-800-447-8477 
(1-800-HHS-TIPS).

    Dated: August 17, 2022.
Gregory D. Demske,
Acting Principal Deputy Inspector General.
[FR Doc. 2022-18063 Filed 8-22-22; 8:45 am]
BILLING CODE 4150-01-P