Apr 132022

DOJ Settles FCA Case Alleging Medically Unnecessary Telehealth Visits, Claws Back PPP Money

Jaime L.M. Jones, Brenna E. Jenny and Krystalyn K. Weaver
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This week DOJ announced one of the first civil settlements under the FCA involving abuse of the pandemic flexibilities that the Department of Health and Human Services used to authorize broader use of telehealth during the COVID public health emergency.  Physician Partners of America (“PPOA”) agreed to pay $24.5 million to resolve allegations that it violated the FCA by billing for medically unnecessary telehealth visits, and by submitting claims for medically unnecessary genetic, psychological, and urine drug tests and claims tainted by violations of the Stark Law.  While DOJ has previously engaged in criminal enforcement actions relating to abuse of the telehealth waiver flexibilities, as discussed further here, this case represents an expansion of telehealth enforcement scrutiny to the civil side.

According to DOJ, after non-emergency medical procedures were suspended in early 2020 due to the pandemic and revenues fell, PPOA directed its physicians to see patients via telemedicine twice monthly, regardless of need, and to bill for these evaluation and management visits with inappropriate high-level procedure codes.  DOJ further alleged that in connection with obtaining a $5.9 million loan through the Paycheck Protection Program (“PPP”), PPOA falsely represented that it was not engaged in unlawful conduct.  DOJ’s Civil Division has in the past generally pursued PPP loan fraud relating to misuse of PPP funds or fraudulent receipt of duplicative loans; DOJ’s decision to leverage alleged healthcare billing improprieties that are completely distinct from PPP eligibility terms as a means to claw back PPP funds may represent a new enforcement trend.

This settlement reinforces that abuse of telehealth regulatory flexibilities remains an enforcement priority for the federal government.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Jaime L.M. Jones

Chicago

jaimejones@sidley.com

Brenna E. Jenny

Washington, D.C.

bjenny@sidley.com

Krystalyn K. Weaver

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