Telehealth Patient Inducements: Free Products, Gift Cards and Copay Promises

Telehealth patient inducements are benefits offered to influence whether a patient attends a visit, accepts a product or obtains a prescription. A free brace, a gift card after therapy and a promise to cover a copay can each put something different in motion. The revealing question for an insider is what the business expected in return. Someone wrote the offer, someone paid for it, and someone decided which service or product would be billed. When the result is unnecessary care billed to a federal program, taxpayers pay and patients bear the consequences.

What Counts as a Patient Inducement?

A patient inducement puts value on the patient’s side of the transaction: a product, a payment or relief from an expense. Its purpose becomes clearer when the offer is connected to the action it was meant to encourage. In Aptihealth’s incentive program, the trigger was therapy attendance. In the allegations against Patient Care America, paying patients’ copays helped support a business generating prescriptions for compounded creams and vitamins.

The patient benefit and the payment to a clinician do different jobs. A marketer may promise a patient a free product while a telehealth company pays a practitioner to approve the order. The supplier then has the prescription it needs to bill a health care program.

The Department of Health and Human Services’ Office of Inspector General describes that arrangement in its telemedicine fraud alert. The alert describes companies recruiting patients, paying practitioners for medically unnecessary orders and selling those orders to businesses that bill federal programs. The practitioner may see a payment described as a chart review, consult or assessment. The business buying the order sees an opportunity to sell a product. The patient sees the offer made at the start.

Free Products Can Start an Order Chain

A free back brace offer can give a call center access to both the patient and the Medicare information needed for later billing. In a whistleblower’s complaint describing Empire Pain’s operation, the whistleblower alleged that sales representatives cold-called Medicare patients from lead lists and asked whether they had pain and might qualify for a free back brace.

According to the complaint, once a patient supplied a Medicare number, the representative added braces the patient had not requested or needed. The call center obtained a telehealth doctor’s prescription, sold the completed lead to a durable medical equipment supplier, and the supplier billed Medicare. The free offer brought the patient into a transaction whose product was a signed order.

A separate government complaint against Regency describes how a sales script dealt with a patient saying their own doctor would refuse a brace. The script supplied another route to a prescription:

The pitch answered a medical objection with a sales solution. The same complaint alleged that a customer service employee at Advanced Medical Supply, a brace supplier, received complaints about unwanted braces and invoices for products patients had been told would be free. Staff were instructed to promise waivers, and a manager routinely removed the balances after complaints.

Those allegations connect the promise to the supplier’s own accounting. The script shows what the patient was told. The invoice and adjustment show how the business dealt with the bill when the patient objected.

Aptihealth Paid Gift Cards After Therapy Attendance

Aptihealth’s gift-card program tied the benefit to attending therapy. Its executed settlement agreement describes an incentive program for approximately 15 patients, with a $25 gift card after attending at least one therapy session. Aptihealth represented that it distributed no more than $250 in total gift cards and discontinued the program by December 31, 2021.

The company admitted the conduct described in the agreement, including the incentive program. The agreement described the gift-card arrangement as potentially violating the Anti-Kickback Statute. Aptihealth’s Medicare and Medicaid billing settlement also covered admitted false billing.

For an employee who handled the incentive program, the offer and the actual distribution are separate facts. Who qualified, who attended and who received a card connect the promise to the service.

Copay Assistance Can Hide Who Paid

Patient Care America allegedly helped pay the copays on prescriptions it filled, then made the payments look like charitable assistance. The Justice Department’s settlement announcement described a compounding pharmacy using outside marketers to generate prescriptions for pain creams, scar creams and vitamins reimbursed by TRICARE, the federal health care program for military members and their families.

The government alleged that the pharmacy and a marketer jointly paid copayments for patients referred by that marketer, without verifying financial need. They allegedly disguised the payments as coming from a sham charity affiliated with the marketer. The patient received relief from a bill. The pharmacy and marketer supplied the money. The apparent charity obscured that connection.

The allegations also followed the prescription upstream. Marketers allegedly paid telemedicine doctors who prescribed without seeing patients and, in some cases, without speaking to them. The products were allegedly formulated to obtain the highest possible TRICARE reimbursement. The government alleged that the pharmacy continued seeking payment despite patient complaints revealing prescriptions generated without consent or a valid patient-prescriber relationship.

Patient Care America and its private equity manager, Riordan, Lewis & Haden, agreed to pay $21,050,000 together in the civil settlement. The government alleged that the investment firm knew about the plan and financed kickbacks to marketers. Two former pharmacy employees had brought the whistleblower case.

The copay promise belonged to a larger financing arrangement. Following it meant connecting the patient account, the marketer’s referral and the source of the supposedly charitable payment to the prescription the pharmacy billed.

What Did the Benefit Influence?

The useful connection runs from the offer to the patient’s action and then to the order or claim. An attendance card points toward a visit. A copay payment points toward the prescription it helps the patient obtain. A free-product script points toward the order the seller wants signed.

Plausible Cause: Connecting the FCA and AKS in the Context of Health Care Fraud, published in Rutgers University Law Review in 2024, examines the connection between kickback arrangements and resulting claims. In proposing an approach to that problem, the paper asks:

That question is useful inside a business, too. The offer, the payment terms and the resulting claims should tell a connected story. We work with insiders to understand which decision the benefit was intended to change and where that decision appears in the billing.

What Are the Common Warning Signs of Fraud?

The Office of Inspector General’s telemedicine alert describes recruitment through free or low-cost offers alongside inadequate patient contact, compensation tied to order volume and a product menu restricted to one item or class of items. It also identifies businesses serving only federal beneficiaries, businesses claiming to exclude those beneficiaries while billing federal programs, and arrangements that provide no expected or workable follow-up.

We work with you to understand how those features connect the patient offer to the claims. The inspector general identifies the potential harm as unnecessary federal spending, unnecessary care and delays in needed treatment.

Paid to Obtain and Refill Prescriptions

Paying the patient can be part of the scheme. In a June 29, 2016 criminal guilty-plea account, the Justice Department described a former pharmaceutical employee who admitted accepting money to obtain and fill her own medically unnecessary compounded prescriptions.

According to that plea account, a marketing business received payments from compounding pharmacies for referring people whose insurance would cover the products. A recruiter gave the employee preprinted prescription forms to take to her doctor. The marketing business then paid her a share of what her employer’s prescription benefit plan paid the pharmacy.

She admitted obtaining refills through pharmacies selected by the marketing business and receiving further payments. The recruiter later directed her to a telemedicine doctor to obtain unnecessary pain cream so those payments would continue. She received $22,445 for her role.

The patient complaints in the Regency and Patient Care America cases describe people objecting to products and prescriptions. Here, the employee admitted accepting money to obtain them.

What Evidence Is Needed to Prove Fraud?

Telehealth fraud evidence is strongest when it connects what the patient was offered, what happened clinically, who paid and what was billed. A call-center employee may know the script used to overcome objections. A clinician may know what information was available before an order was signed. An employee handling patient accounts may know who authorized copay payments or removed balances.

A script preserves the promise. Attendance and clinical records show the service behind a visit claim. Gift-card distributions, copay payments and account adjustments show how the business delivered the benefit. Prescription orders and supplier claims connect that benefit to the product and payer. We help you connect those pieces into a whistleblower case. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The response to patient complaints can be especially revealing. Continuing to bill or waiving a charge after a complaint reflects a decision inside the operation that a claim total alone cannot explain. We assess the incentive arrangement and the resulting claims with you, including what your role lets you explain about the connection.

When You Know What the Offer Bought

If you worked with the scripts, gift cards, copay payments or prescriptions, talk to our whistleblower experts about what patients were offered and what the business billed. We build your strongest telehealth whistleblower case with you around the people, payments and decisions behind the offer. We bring in healthcare fraud whistleblower lawyers who understand telehealth kickbacks and stay beside you through the case.