Medicare Audit Report Shows Half Million Beneficiaries' Telehealth Claims were Overbilled

12 Sep, 2022 F.J. Thomas


Sarasota, FL ( – Medicare refers to telehealth as, “services that are provided remotely using technology between a provider and a beneficiary.” ‘Virtual care services’ are those services that are always provided remotely, and can include office and home visit evaluations as well as nursing home visits, and behavioral health.

In the midst of the pandemic, CMS Medicare increased approved telehealth services from 118 to 264, and relaxed the audio only requirements. Studies showed that not only had the use of telehealth increased drastically during that time, but the time spent in those evaluations had actually increased as well.

In the first year of the pandemic, more than 28 million Medicare patients, equating to 2 out of 5 people, used a telehealth service for the first time. With an astounding increase in a service that was still relatively new, it is no surprise telehealth services would be under the Medicare audit radar at some point.

A recent study led by the CDC in coordination with the National Institutes of Health suggested that the use of telehealth was associated with improved compliance, and reduced odds of overdose. However, an audit risk report released this week by the U.S. Department of Health and Human Services Office Of Inspector General (OIG) indicates that providers may not be billing so accurately for telehealth services.

Auditors reviewed claims from March 1, 2020, to Feb. 28, 2021, from approximately 742,000 healthcare providers. The OIG found that 1,714 providers were deficient in 1 of 7 measures developed in the audit, resulting in unsupported claims for over a half million patients and $127.7 million in ill-gotten reimbursement. The auditors found instances in which the services were not medically necessary, and cases where the services were never provided. Additionally, the auditors noted 41 high-risk providers that were associated with telehealth companies, however they noted that there is currently not a systematic way to easily identify those scenarios.

The seven measures the auditors utilized in gaging the provider billing included:

  • Frequent billing of a telehealth service and facility fee
  • Frequent upcoding of claims to the highest level
  • High number of days billed
  • High average number of hours per telehealth visit
  • High number of Medicare beneficiaries
  • High number of telehealth claims that include medical equipment 





A total of 1,696 providers caused concern on 1 measure, and 18 providers were flagged on 2 of the measures. Additionally, 57 percent or 991 providers were part of the same practice as at least one other provider whose billing also posed a high risk.

Seventy-five percent of the claims for 672 providers included a facility fee and telehealth service, essentially suggesting the patient and provider were in the same location, which voids the need for virtual services. A total of 148,000 claims were billed with this scenario, resulting in $14.3 million in reimbursement. Additionally, 21 providers had billed for more than 1,000 claims each that included both the telehealth service and facility fee. A total of 57 providers had billed for a facility fee on every single telehealth claim billed.

In many cases, reimbursement for the highest level of evaluation codes can be more than double the reimbursement for the lowest code.  More than 360 providers always up-coded their telehealth claims. Additionally, 170 providers always billed the highest code possible on all of their 34,400 virtual office visits, resulting in $2.2 million in reimbursement. Two of these providers billed over 1,300 claims each.

Upcoding was not limited to individual physicians as auditors noted 21 practices with multiple providers who routinely upcoded their telehealth claims. In fact, one practice had 30 physicians who followed this trend of upcoding.

A total of 14 providers billed for additional time, driving the office visit past the highest level. One provider billed additional time on 90 percent of their claims.

A total of 195 providers always billed for other services and upcoded those as well. The services included home, nursing and assisted living visits. The total claim impact was 40,300 claims with a total reimbursement of $3 million. Five providers billed more than 1,000 claims each, and one provider not only billed the highest level for other services but included an additional time charge as well.

For high number of telehealth days, 328 providers billed more than 300 days per year with an average of 25 days per month per provider. Auditors noted that the average days billed was 26 days per year per provider. The total reimbursement  to this set of providers was $65 million, and 96 of belonged to the same medical practice as at least one other provider on the high day list.

Sixty-seven providers ordered medical equipment in addition to their telehealth services, exceeding the 3 percent median and gaining $28 million in reimbursement. The auditors noted that 6 providers billed primarily telephone services, speculating that the providers could be cold-calling patients to increase the order number.

Overall, the OIG suggestions included targeting closer monitoring and oversight of telehealth services; providing more telehealth education to healthcare providers; improving the transparency of incident to services when non-physician staff primarily deliver the care during a telehealth session; and identifying telehealth companies. It will be interesting to see what impact the new recommendations will have on not only providers and practices, but for the companies that execute the telehealth services for them.

We build it. We brand it under your name. We make required forms and posters available to your clients 24/7. The Workers' Compensation Virtual Claims Kit is a fully brandable service that carriers and employers can use within their website or service portal.


  • AI california case management case management focus claims cms compensability compliance courts covid do you know the rule exclusive remedy florida glossary check Healthcare health care iowa leadership medical medicare minnesota NCCI new jersey new york ohio opioids osha pennsylvania Safety state info technology tennessee texas violence virginia WDYT west virginia what do you think women's history month workcompcollege workers' comp 101 workers' recovery workers' compensation contact information Workplace Safety Workplace Violence

  • Read Also

    About The Author

    • F.J. Thomas

      F.J. Thomas has worked in healthcare business for more than fifteen years in Tennessee. Her experience as a contract appeals analyst has given her an intimate grasp of the inner workings of both the provider and insurance world. Knowing first hand that the industry is constantly changing, she strives to find resources and information you can use.

    Read More

    Request a Demo

    To request a free demo of one of our products, please fill in this form. Our sales team will get back to you shortly.