backHHS OIG Identifies $2.26 Million in Potentially Improper Medicare Payments for Virtual Check-In and E-Visit Services
On April 23, 2026, the HHS Office of Inspector General (OIG) published a report examining whether CMS is paying providers for virtual check-in and electronic visit (or e-visit) services that may not have complied with Medicare requirements. Beginning in 2019, CMS introduced virtual check-ins and e-visits to improve Medicare enrollees’ access to virtual health care. These services were designed to let patients consult with their doctors remotely and avoid unnecessary office visits. The OIG undertook this audit to determine whether there were vulnerabilities that could lead to improper payments for these virtual care services and to identify opportunities to reduce that risk. The audit examined approximately $24.2 million in Medicare payments for virtual check-in and e-visit services from January 2019 through December 2022.
The OIG found that CMS made a total of 183,524 potentially improper payments worth approximately $2.26 million during the audit period. The bulk of these payments, roughly $1.96 million, involved virtual check-in services that appeared to be connected to a recent evaluation and management (E/M) visit for the same medical condition, meaning the virtual check-in likely should not have been separately billed. In many of these cases, providers attached modifiers to the related E/M claims, which allowed those claims to bypass automated payment safeguards and be paid when they potentially should not have been. Additionally, CMS paid approximately $298,200 for over 10,000 e-visit services that were billed multiple times within a seven-day window for the same medical condition, when they should have been billed as a single service reflecting the cumulative time spent with the patient. The OIG attributed these issues to two main causes: (1) CMS and its Medicare Administrative Contractors (MACs) did not have automated system checks, known as “system edits,” in place to flag these bills for further review; and (2) providers may not have been adequately educated on how to properly bill for these relatively new services.
In response to these findings, the OIG made three recommendations to CMS. First, the OIG recommended that CMS develop automated system edits to flag virtual check-in services billed close in time to an E/M service with the same diagnosis, to flag e-visits billed separately within seven days for the same condition, and to reject claims where virtual check-ins and E/M services are billed together on the same claim. Second, the OIG recommended that CMS strengthen the billing code descriptions for virtual check-ins to clarify key terms like “related or same medical condition” and “soonest available appointment.” Third, the OIG recommended that CMS further educate providers on proper billing practices for these services.
CMS agreed with the first and third recommendations, stating that it has already implemented some system edits since the audit period and it will continue to educate providers on the billing requirements. However, CMS disagreed with the second recommendation, arguing that clarifying billing terminology would be better accomplished through subregulatory guidance rather than formal changes to the code descriptions. The OIG disagreed with CMS’s response and did not change its second recommendation, noting that informal guidance is not legally binding and cannot be enforced.
A copy of the OIG Report is available here.
Reporter, Marcia Foti, Washington, D.C., +1 202 626 9543, mfoti@kslaw.com
DOJ Announces West Coast Health Care Fraud Strike Force
The Department of Justice (DOJ)’s National Fraud Enforcement Division has announced the formation of a multi-district health care fraud enforcement initiative known as the “West Coast Health Care Fraud Strike Force” (West Coast Strike Force). The West Coast Strike Force will combine the resources of the DOJ’s Fraud Division with the resources of the U.S. Attorney’s Offices for the District of Arizona, District of Nevada, and Northern District of California. The West Coast Strike Force will also work in conjunction with the Office of Inspector General, the Federal Bureau of Investigation, and the Drug Enforcement Administration.
The DOJ has expressed concerns about ongoing health care fraud schemes that target federal programs such as Medicare, particularly those schemes involving health care technology companies in Northern California, which, according to DOJ data analytics, have migrated to Nevada and Arizona. The DOJ points to examples of recent fraud prosecutions in the Northern District of California and the District of Arizona related to misuse of COVID-19 funds, unlawful distribution of controlled substances, and wound graft fraud.
According to the DOJ, its “Strike Force” model has been responsible nationally for the prosecution of more than 6,200 defendants who collectively billed federal health care programs and private insurers more than $45 billion. The formation of the West Coast Strike Force follows the DOJ’s 2025 expansion of its New England Health Care Strike Force into Massachusetts, which resulted in the recovery of more than $560 million in alleged health care fraud losses.
The DOJ’s Press Release related to the West Coast Strike Force is available here.
Reporter, William Mavity, Los Angeles, +1 213 218 4043, wmavity@kslaw.com
DOJ Announces Fraud Initiative Focused on Data Miners
On April 30, 2026,the Department of Justice (DOJ) announced the Fraud Oversight through Careful Use of Statistics (FOCUS) initiative, a new program designed to improve the Department’s ability to prioritize and partner with data miners who file qui tam complaints under the False Claims Act (FCA). The initiative arrives at a time of rising whistleblower activity, with increasing numbers of cases driven by individuals and companies that leverage publicly available data rather than traditional insider knowledge to identify potential fraud. This initiative underscores DOJ’s willingness to rely on data patterns as potential evidence of FCA violations, and highlights the need for providers to proactively monitor trends in their claims data. Additionally, FCA defendants should be prepared to aggressively challenge this reliance on non-insider information as inconsistent with both Federal Rule of Civil Procedure 9(b)’s requirement of pleading fraud allegations with specificity and the FCA’s public disclosure bar, which prohibits basing cases on publicly available reports.
Traditionally, company insiders have filed qui tam complaints. However, we have seen an increase in qui tam complaints over the past few years by data miners who analyze publicly available data for potential fraud patterns. The number of FCA qui tam complaints increased over the past two years from 980 complaints in 2024 to 1,300 qui tam complaints in 2025.
The Department has noted that successful data miners can identify signals in publicly available data sets that correlate with fraudulent conduct. Many of the best data miners are now taking advantage of artificial intelligence models and capabilities to further isolate and discover fraud signals from large public datasets.
The Civil Division has launched this new FOCUS initiative to proactively engage with data miners who have built effective tools for identifying fraud. Setting up a meeting with the Department is not a prerequisite to filing, but the Department stated that it will give precedence to working with the most successful data miners who are diligent, have shown analytic rigor, and have experience with program rules. The Department recommends that data miners who want to work with the Department identify a material statutory, regulatory, or contractual violation, provide a roadmap for investigation, identify witnesses to interview, evidence to obtain, and be mindful of legal requirements for bringing a successful fraud action.
The FOCUS initiative is part of the Department’s broader anti-fraud efforts. On April 7, the Department launched the first-ever National Fraud Enforcement Division (NFED). The FOCUS initiative is intended to support the NFED’s anti-fraud mission.
More information about the FOCUS initiative is available here.
Reporter, Taylor Whitten, Sacramento, +1 916 321 4815, twhitten@kslaw.com
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Life Sciences & Healthcare Roundtable: A Review of the FY 2027 IPPS and LTCH PPS Proposed Rule: Highlights and What to Expect
Join us for a roundtable on May 14, 2026, to discuss the major proposals contained in the inpatient prospective payment system final rule for FY 2027, including the payment rate updates, the proposed prohibition on Diversity, Equity and Inclusion in graduate medical education programs, changes to the methodologies for calculating overhead costs, and changes to allow organ procurement costs.
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