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The COVID-19 Public Health Emergency (“PHE”) led to a rapid expansion in the utilization of telehealth. Now, almost three years later, governmental entities have focused their attention on telehealth services and the potential for fraud and abuse. In July 2022, the Department of Health and Human Services Office of Inspector General (“OIG”) issue a Special Fraud Alert alerting practitioners to exercise caution when entering into arrangements with telemedicine companies. The issuance of this report is a significant step and reinforces the government’s interest in scrutinizing telehealth arrangements. The Department of Justice (“DOJ”) and the Drug Enforcement Agency (“DEA”) have also launched several high-profile investigations that the industry is monitoring closely. Telehealth providers should carefully review and update their practices given the heightened enforcement climate.

Notable Updates

Anticipated Termination of the PHE

On October 13, 2022, Health and Human Services (“HHS”) Secretary Xavier Becerra renewed the COVID-19 PHE and the PHE is now set to expire on January 11, 2023. Although it is likely the PHE will be extended again, providers should focus on compliance as it will eventually reach an end. The Centers for Medicare & Medicaid Services (“CMS”) temporarily approved certain telehealth flexibilities during the PHE. Some flexibilities will remain in effect 151 days after the PHE expires while others may remain in place until the end of the year in which the PHE ends. Telehealth providers should carefully monitor the status of the PHE and any announcements from HHS.

Ryan Haight Act

The Ryan Haight Act of 2008 generally requires a prescribing practitioner to have conducted at least one in-person medical evaluation of a patient prior to prescribing controlled substances via telehealth. During the PHE, the DEA waived the in-person evaluation requirement, provided certain conditions are met. This flexibility is set to expire at the end of the PHE, and the DEA has not yet released any plans to ensure continuity of care from the PHE waivers. In response, there have been notable calls to action from legislators, including Sen. Mark Warner, and industry groups. On June 22, 2022 the White House Office of National Drug Control Policy released its guidance titled “Telehealth and Substance Use Disorder Services in the Era of COVID-19: Review and Recommendations.” The guidance recommends DEA consider making permanent the changes implemented during the PHE, including by authorizing qualified practitioners to prescribe controlled substances to patients using telehealth without first conducting in-person evaluations.

In addition to the lack of information from the federal government regarding the permanency of the waivers, it is also unclear how states will approach the Ryan Haight Act after the PHE. The New York Office of Mental Health had released an Informational Bulletin on May 10, 2022 titled “Prescription of Controlled Substances after the Federal Public Health Emergency for COVID-19” which has since been removed from the website and withdrawn. The guidance had reaffirmed that providers will be required to comply with the Ryan Haight Act when the PHE ends, and specifically recommended that practitioners begin scheduling in-person appointments before the end of the PHE to manage workload and mitigate risk to patients. With the removal of this guidance, though, it is uncertain how New York will enforce the Ryan Haight Act.

Increased DOJ Activity

Although the PHE and its telehealth flexibilities currently remain in effect, the DOJ has started to investigate allegations of fraud and violations of the Controlled Substances Act. For example, the DOJ is investigating telehealth start-ups for potential violations of the Controlled Substances Act, including their prescription and distribution of potentially addictive drugs such as Adderall and Xanax. The over-prescribing of certain controlled substances which are currently in shortage, such as Adderall, may be subject to heightened scrutiny. The DOJ also brought criminal charges earlier this year against 36 defendants for $1.2B in healthcare fraud for fraudulent telemedicine schemes. As highlighted by the Special Fraud Alert, telehealth services are an area of OIG focus.

Looking Forward

The DOJ has utilized information found on public-facing sources related to prescribing habits to launch its investigations. Telehealth providers should carefully review and monitor their public information. Additionally, providers should proceed with caution when prescribing treatments for behavioral and mental health, given the DOJ’s heightened scrutiny in this area. The PHE is not a shield against liability, and enforcement continues while the PHE remains in effect. When the PHE draws to an end, and state and federal waivers are terminated, navigation of both state and federal law will be required. Sheppard Mullin will continue to monitor developments and provide updates as they arise. Providers with questions or seeking counsel can contact any member of our Healthcare team for assistance.