A Lifeline for Care, A Gateway for Fraud Gloria’s Pandemic Dilemma: Telemedicine to the Rescue

For Gloria, a historian and tour guide in Littleton, Colorado, spring 2020 was supposed to be the start of her busy season.  But when COVID-19 hit, everything changed.  Gloria lost her job as the hospitality industry shuttered, and her world turned upside down in what felt like an instant.

Her husband, Dennis, an HVAC engineer, was one of the critical workers exempted from Governor Jared Polis’s Stay at Home , issued on March 25, 2020, to curb the rapid spread of COVID-19.  While Dennis spent long hours maintaining essential systems in hospitals and grocery stores, Gloria shouldered the responsibility of caring for their 18-month-old toddler, Jack, and 7-year-old daughter, Lily, while managing the anxiety of an unprecedented pandemic.

“I loved my job.  I loved meeting new people every day,” Gloria says.  “But then, suddenly, I wasn’t a historian anymore —I was a full-time, stay-at-home mom.”

Her 7-year-old daughter Lily’s school transitioned to remote learning.  And her son Jack’s preschool shut -down as well.  Lily struggled to focus on her Zoom classes, often getting distracted by the toys scattered around their small home or the antics of her 18-month-old brother, Jack.

By Thursday, April 2, the tension in Littleton was palpable.  The city had confirmed at least 24 COVID-19 cases, and the headlines were grim.  Swedish Medical Center in nearby Englewood was reportedly stretched thin and inundated with patients as ICU beds filled rapidly.  Some hospitals were even running out of space in their morgues.   Many of us, like Gloria, found the constant stream of unsettling news concerning Covid-19 hard to ignore.  “It was a tough time for us — for everyone, really.  There was the constant panic of ‘What if it happens to us?  What if one of us gets really sick?'”

That morning, her fears began to crystallize.  Gloria’s dry cough, something she’d been brushing off as a minor nuisance, had worsened.  Her energy was fading.  She was exhausted and unsteady.  She tried to push through her symptoms, but Jack started tugging at his ear, his cries escalating.  His pain was unmistakable—it had to be an ear infection.  Gloria’s stomach sank at the thought of seeking medical help.  The idea of walking into a hospital teeming with COVID-19 cases felt like gambling with her family’s health.  It wasn’t just Jack she needed to protect; it was all of them.

“I’d heard so many bad stories about people catching the virus in hospitals and getting worse,” Gloria says.  “The idea of exposing myself—especially with two kids to think about—was terrifying.”

THE TELEMEDICINE LIFELINE

Desperate for a solution, Gloria remembered something she’d read about telemedicine.  Dennis’ medical insurance from work covered telemedicine and actively encouraged members to use it, especially during the pandemic.  Neither Gloria nor Dennis had ever tried it before; it always seemed like an unfamiliar option they’d never needed—until now.  With Jack crying inconsolably and her symptoms worsening, Gloria decided to give it a try.

She quickly scheduled a virtual appointment, something she’d never done before.  Within hours, she was connected with a kind pediatrician who diagnosed Jack’s ear infection through a video call.  The doctor prescribed antibiotics for Jack and provided advice for managing Gloria’s symptoms at home.

By that evening, Dennis had picked up the prescription from the pharmacy on his way home from another exhausting shift.  Gloria felt relieved.

“Telemedicine was a lifesaver that day,” Gloria admits with relief.  “It wasn’t perfect, but it gave us a way to get the care we needed without stepping into a hospital.”

The comfort and reassurance that telemedicine provided at that moment was immeasurable, and it’s a feeling that many others have experienced during this challenging time.

WHAT IS TELEMEDICINE?

At its core, telemedicine provides healthcare services remotely using telecommunications technologies.  Unlike the broader concept of telehealth—which encompasses non-clinical services like administrative meetings and educational sessions—telemedicine focuses on clinical interactions such as diagnosis, treatment, and follow-up care.  It can occur in several formats:

• Synchronous Telemedicine: Real-time video consultations between patients and healthcare providers.  Doctor on Demand, Teledoc, and Amwell are a few HIPPA-compliant apps that facilitate this.
• Asynchronous Telemedicine: The “store-and-forward” method, where patients submit medical data (like images or test results) for later review by a provider.
• Remote Patient Monitoring: Remote patient monitoring involves wearable devices and digital platforms that collect and analyze patient health data.  Patients can use connected devices to track vital signs or submit readings from personal blood glucose monitors, bathroom scales, blood pressure monitors, smart watches, or other devices.  This data can then be sent to their medical professionals.

While the technology predates COVID-19, its adoption was limited by stringent Medicare and Medicaid reimbursement policies. These policies typically required in-person consultations as a prerequisite for telemedicine visits. However, with the onset of the COVID-19 pandemic, there was a seismic shift in patient care and billing, which broke down many of these regulatory barriers.

Telemedicine’s Boom During COVID-19

Gloria’s story is far from unique. As COVID-19 swept across the country, telemedicine became a crucial lifeline for families nationwide. Although the technology—allowing patients to consult with doctors via video or phone—wasn’t new, its adoption was limited before 2020 due to strict regulations and limited insurance coverage.

As COVID-19 shifted from a health emergency to a full-blown pandemic, telehealth emerged as a vital resource in providing essential healthcare. An increasing number of people were subject to remain-at-home orders or couldn’t quickly get an appointment with their primary care physician, and many didn’t want to take a chance on exposure and leave home.

THE SLOW EXPANSION OF TELEMEDICINE UNTIL COVID-19.

Despite its potential to revolutionize healthcare, the practice of telemedicine has typically faced substantial challenges that limit its effectiveness.  Chief among them are physician licensing laws.  Forty-eight of the Fifty states in the U.S. require physicians practicing telemedicine to be licensed in the same state where the patient resides.  This limits access, especially in underserved rural areas where specialists are scarce.  Although multistate compacts, like the Interstate Medical Licensure Compact, have simplified licensing for some providers, bureaucratic barriers still create a bottleneck in telemedicine’s broader adoption​.

Additionally Hurdles

Having a steady, reliable internet connection remains a steadfast block in specific rural communities where broadband access is often unavailable or prohibitively expensive, thus making it impossible for patients to participate in video consultations.   Although telehealth regulations have been relaxed to allow phone consultations, telehealth appointments are typically managed through systems requiring video interactions.  While a physician can, of course, simply call a patient—and in some cases, that may be entirely appropriate—video consultations offer distinct advantages.  The ability to see the patient, observe their demeanor, and establish visual contact enhances the doctor’s ability to accurately diagnose, while also promoting patient safety.

Older populations and senior citizens who are not as familiar with technology or need an adequate set-up — a smartphone or a computer with a camera, struggle with telemedicine unless they are assisted.

COVID-19 AND RESULTING COVERAGE CHANGES

The COVID-19 pandemic was the catalyst for telemedicine’s exponential growth.   Herein was a major issue.  Prior to the Covid-19 pandemic nearly telehealth visist were billed and reimbursed at a lower rate than in-person visits.  Faced with overwhelmed hospitals and the need for social distancing, the federal government eased restrictions on telemedicine through emergency waivers that enable the Centers for Medicare and Medicaid Services to allow telemedicine to be reimbursed at the same rate as in-person visits.  This was a monumental shift in billing and patient care as it meant that there was expanded medical provider eligibility, and the once-limiting geographic restrictions were then waived.

These changes were transformative.  Between March and June 2020, telemedicine visits for Medicare beneficiaries surged by 2,632% compared to the same period in 2019.

Telemedicine became not only a convenience but in many cases, like Gloria’s, a necessity.  It helped to keep high-risk patients out of hospitals while maintaining access to routine care.  Unfortunately, this rapid expansion came with unintended consequences— an increased susceptibility to fraud.

Generally, the federal government relaxed rules to allow doctors to see patients virtually across state lines, and Medicare expanded its coverage for telehealth visits.  The results were staggering.  By April 2020, nearly half of all Medicare

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1  Centers for Medicare and Medicaid Services.  Available at https://www.medicaid.gov/resources-for-states/downloads/medicaid-chip-beneficiaries-COVID-19-snapshot-data-through-20200630.pdf (last accessed November 21, 2024).

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primary care visits were conducted via telemedicine, compared to just 0.1% two months earlier.

In Colorado, telemedicine became an essential tool for residents seeking care while avoiding crowded hospitals.  For families like Gloria’s, it provided a safer alternative during a terrifying time.

THE DARK SIDE OF TELEMEDICINE

As telemedicine usage surged, so did fraudulent activity.  While the technology itself isn’t to blame, its rapid expansion created vulnerabilities that fraudsters were quick to exploit.

Some typical programs include:

• Billing for Services Not Rendered: Fraudsters file claims for fake telehealth appointments.
• Upcoding: Providers bill for more complex and expensive services than were actually delivered.
• Kickbacks: Some telehealth companies pay providers for unnecessary treatments or prescriptions.
• Prescription Fraud: Controlled substances, such as Adderall, are prescribed without proper evaluations.

One shocking case in Colorado involved Renee Fasano, the owner of Southern Colorado Telehealth in Pueblo County.  Prosecutors accused Fasano of operating a fake telehealth clinic out of her home and defrauding Medicaid of over $570,000.  She allegedly billed for services like diabetes management and substance abuse counseling that were never provided.

Cases like this drain critical resources from patients who truly need care.

Fasano’s fraudulent billing took place between March 2020 and April 2021 — the time that coincided with the early stages of the COVID-19 pandemic when telehealth usage surged due to lockdowns and social distancing measures.

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2  Epstein , J., & Lkhagvajav, Z. (2023, October 18). Will the Doctor “See” You Now?  The Development and Implementation of a Targeted Telemedicine System for Primary Care.  National Library of Medicine.  Retrieved November 22, 2024, from https://pmc.ncbi.nlm.nih.gov/articles/PMC10610031/

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The timing of Fasano’s scheme raised concerns about the exploitation of the rapid expansion of telehealth services during the pandemic.  On numerous occasions, it has been found that the relaxation of telehealth regulations and increased reliance on virtual care created opportunities for fraudulent actors.

Fasano’s fraudulent scheme unraveled when Medicaid beneficiaries began receiving correspondence from Medicare stating that Southern Colorado Telehealth had billed them for services, services they purportedly never received.  Indeed, in her affidavit, Fasano admitted as much, conceding that she had not met with any of the individuals for whom she submitted claims.  She illegally accessed a patient database from her previous health-related job and billed their insurance, primarily Medicare, for the fraudulent telehealth session.  Her arrest warrant shows that she billed for a wide variety of services, including Therapeutic exercises, smoking cessation, depression screening, neuromuscular re-education, Home visits, as well as developmental and behavioral screening and testing.

Consequently, Fasano was charged with two counts of Medicaid fraud, including a class 3 felony and a class 5 felony.  Under Colorado law, a conviction on both counts could have resulted in a sentence of up to 15 years imprisonment.  On July 7, 2023, Fasano was convicted of Medicaid fraud and waste, a class 4 felony, and sentenced to 20 years of intensive supervised probation, 90 days in county jail, and ordered to pay restitution in the amount of $567,935.  This restitution formed part of the $1,155,309 recovered by the Medicaid Fraud Control Unit for the State of Colorado in 2023.

TELEHEALTH FRAUD ACROSS THE COUNTRY

Telehealth fraud isn’t just a Colorado problem—it’s a national issue.  In 2020, the Department of Justice charged 86 individuals nationwide in a large-scale crackdown on telemedicine fraud.  The illegal schemes uncovered ranged from fraudulent prescriptions to illegal kickbacks tied to genetic testing and providing non-existent patients with medical equipment.

The Done Global case is a prominent example of telemedicine fraud and the first time the Department of Justice prosecuted a digital health company executive for distributing controlled substances through telemedicine.

Done Global was known as an “ADHD start-up.”  They market themselves as a provider of personalized online treatment for ADHD.  Based in San Francisco, it provides online diagnosis, treatment, and medication refills for Attention Deficit Hyperactivity Disorder (ADHD).  The company operated on a subscription-based model where individuals paid a monthly fee for these services.  The Justice Department alleges that Done Global’s executives, Ruthia He, and David Brody, orchestrated a scheme to illegally distribute Adderall and other stimulants through an illicit telehealth system.  The company allegedly provided prescriptions for these controlled substances to patients who did not need them, billing insurance companies for the medications.

The company allegedly discouraged follow-up care for patients by restricting physicians’ compensation to initial consultations and offered a feature allowing subscribers to obtain automatic refills of their prescriptions.  These practices, combined with aggressive social media advertising promoting “easy” access to Adderall, allegedly generated over $100 million in revenue and resulted in the prescription of more than 40 million pills.  This fraud, however, was not borne out of telemedicine.  It could have existed without the use of telemedicine.  It is precisely telemedicine that made the growth and pervasiveness of this fraud rise to the 100 million dollar mark of ill-gotten gains.

While fraud can occur in any healthcare setting, the criminal cases of Done Global and Renee Fasano highlight how the rapid expansion of telehealth, particularly during the COVID-19 pandemic, coupled with relaxed regulations, created vulnerabilities that were exploited by fraudulent actors and those willing to thwart the system.

THE FUTURE OF TELEMEDICINE

For Gloria, telemedicine was crucial during an incredibly challenging time.

“Yeah, I’ve used TeleDoc a few times since the pandemic, but there’s only so much a doctor via telehealth if you have a sprained wrist,” Gloria recalls as she motions to her bandaged left hand.  “You still end up in urgent care.  I have to say, though, it was a real time saver when Lily got strep throat.”

As telemedicine use continues to grow, so do the questions about its usefulness and vulnerabilities.  How can this critical healthcare tool remain accessible while preventing fraud and abuse?

In Part 2, we’ll examine how telehealth fraud operates, what actions law enforcement is taking to combat it, and practical tips for doctors and patients to safeguard themselves.

In Part 3 we examine the link between Medicare and Telehealth fraud.

Stay tuned!