5 Telehealth Fraud Red Flags to Watch For

Telehealth was one of the biggest pandemic success stories—suddenly, patients could see a doctor without leaving the house. But when healthcare went remote almost overnight, fraud quickly followed.

Now, claims teams are left sorting through piles of telehealth claims trying to figure out what is legitimate.

The good news is you don’t have to be a doctor or digital forensics expert to spot the patterns. These five red flags can help you catch telehealth fraud early, before the damage is done.

1. Unbelievable Volume of Telehealth Visits

If a provider is billing for hundreds of telehealth visits in a single day, an alarm should go off immediately. According to the U.S. Department of Health and Human Services Office of Inspector General (HHSOIG), some telehealth providers billed for thousands of telehealth services per month, far beyond what any physician could realistically perform.

Even in a virtual visit, clinicians need time to review patient history, conduct consultations, record notes, and finalize documentation. According to the Centers for Medicare & Medicaid Services, typical remote appointments take 15-30 minutes minimum, depending on complexity.

What to watch out for:

• Repeat names in daily logs
• Spikes in billing during off-hours or weekends
• Unusual month-to-month jumps in telehealth billing

HHSOIG flagged over 1,700 providers based on billing patterns— showing that pattern analysis is one of the most effective tools to identify potential fraud.

2. No Documented Patient Contact

A major red flag in telehealth fraud is when providers approve prescriptions, durable medical equipment (DME), or costly generic tests without ever seeing or speaking with the patient.

The Coalition Against Insurance Fraud flags claims lacking detailed medical notes, vital signs, or documented patient contact as suspicious and worthy of deeper review.

Example:

In 2023, a Houston-based telehealth clinic was shut down after investigators uncovered a scheme involving thousands of expensive genetic tests ordered without proper patient consultations or documented medical history. Many patients were unaware that tests had been ordered in their names. This fraudulent operation resulted in more than $20 million in false claims submitted to Medicare and private insurers. The U.S. Department of Justice charged the clinic’s operators with healthcare fraud, highlighting the absence of legitimate patient evaluations as a key factor in the case.

3. Geographic Mismatch

Another warning sign: the provider, patient, and pharmacy are all in different states. For example, a doctor licensed in California is billing for patients in Florida, while prescriptions are being filled in Texas.

These kinds of cross-state setups can be legitimate, but they’re also a common tactic used in fraudulent schemes to make connections between clinics, providers, and pharmacies harder to trace. The U.S. Department of Justice has cited unusual geographic patterns as key evidence in telehealth fraud cases, especially when providers bill in states where they’re not licensed or where there’s no clear relationship to the patient.

What to watch out for:

• Equipment being shipped from out-of-state pharmacies
• Providers billing for services in regions where they don’t hold licenses
• Claims showing the same provider treating patients across multiple states

If the locations don’t line up logically, it’s worth taking a closer look.

4. High Frequency of DME and Genetic Testing Orders

Certain products and tests are especially attractive to fraud rings because they’re expensive and easy to order via telehealth. Durable Medical Equipment (DME) like back braces and knee supports often show up in fraudulent claims, often without any real medical need.

Genetic testing, including pharmacogenomic (PGx) and cancer genomic (CGx) panels, has become another major target. These tests, which can cost thousands of dollars each, are often ordered without proper medical justification. The HHS-OIG reported a nationwide genetic testing fraud scheme involving 35 defendants and approximately $2.1 billion in losses—orders facilitated by telehealth consults or telemarketing campaigns.

The Coalition Against Insurance Fraud consistently warns that telehealth-facilitated overuse of DME and genetic tests is a growing source of false claims. Even worse, these high-ticket orders are often processed in bulk with no meaningful clinical evaluation.

5. Telehealth Providers with No Established Medical Practice

Finally, watch out for providers or clinics that have no physical office, no patient history, and no established reputation. Often, these providers exist only on paper—registered under shell companies or virtual addresses.

The HHSOIG has repeatedly warned about these “ghost clinics,” where telehealth services are billed at high volumes for providers who appear to be phantom operations. The Department of Justice has also cited shell company setups as key evidence in cases where clinics pop up suddenly, submit large claim volumes, then vanish once they’re under scrutiny.

Verify the provider’s physical address, check credentials with state medical boards, and search for an online presence and patient reviews.

If there’s no real-world footprint—no office, no background, and no accountability—it’s a strong signal that something is off.

According to the Coalition Against Insurance Fraud, healthcare fraud costs the U.S. billions every year, and telehealth has become a key front in that fight. It’s important to be able to spot the patterns and red flags because the earlier you catch telehealth fraud, the easier it is to stop.

Curious how these red flags might show up in your claims? Connect with our team today. 

Check out our sources:

Centers for Medicare & Medicaid Services. Telehealth Services. www.cms.gov.

Coalition Against Insurance Fraud. Telehealth Fraud: How Criminals Exploit Remote Care. www.insurancefraud.org.

U.S. Department of Health and Human Services, Office of Inspector General. OIG’s Work Plan and Telehealth Oversight. oig.hhs.gov.

United States Department of Justice. Health Care Fraud. www.justice.gov/criminal-fraud/health-care-fraud.