Beware of the Telemedicine Trap

For more information about this blog post, please contact Khaled J. KleleRyan M. Magee, or Labinot Alexander Berlajolli.

When New Jersey enacted the Telemedicine Act, N.J.S.A. 45:1-62 et al. (the “Act”), many physicians celebrated.  Although telemedicine is a good thing for the health care industry, it is not the free-for-all that many physicians believe.  For example, the Act requires that the physician be licensed in the state in which the patient is located.  Many telemedicine statutes implemented by other states are similar to the Act.  As a result, a physician licensed in New Jersey cannot engage in telemedicine with patients in other states unless the physician is also licensed in those states.  In addition, the Act requires the physician to provide the patient with certain information, including his or her professional credentials, before engaging in telemedicine and, therefore, it is important to have a proper consent form.

Importantly, the Act requires the physician to establish a provider-patient relationship before prescribing medication to the patient based solely on answers to an online questionnaire, and the Act specifies how to establish that relationship.  The Act also imposes additional restrictions in prescribing Schedule II Controlled Substances.  Under the Act, a physician may not issue a prescription for a Schedule II Controlled Substance until after an initial in-person examination of the patient, and then the physician must have in-person visits every three months for the duration of the time the patient is being prescribed the Substances. 

Thus, beware of telemedicine companies who want to hire you to prescribe medications and/or durable medical equipment for patients who live outside of the state of your practice and with whom you have little to no interaction. Two recent cases warrant your attention and hesitation.  

Just recently, two owners of telemedicine companies, Advantage Choice Care LLC and Tele Medcare LLC, were charged in a $56 million alleged scheme.  These companies had offices in Bayonne, New Jersey, Boca Raton, Florida, and Richmond Hill, Georgia. 

This follows indictments in the largest insurance fraud scheme ever investigated by the DOJ–worth $1.2 billion–that involved two telemedicine companies, Video Doctor USA and Telemed Health Group. The CEO recently pled guilty to the charges.  

The story is the same in each case.  Besides paying and receiving kickbacks from suppliers, the telemedicine companies hired physicians to write prescriptions based on answers to online questionnaires from patients with whom the physicians had limited contact or no contact at all, a practice which raised the attention of regulators.

As a result, before working for a telemedicine company that requires you to prescribe medication or durable medical equipment to patients located across state lines, you must comply with the Act as well as the telemedicine laws in place where the patient is located.  You must also establish, among other things, a provider-patient relationship besides just reviewing answers to an online questionnaire.