On June 13, 2024, the Justice Department announced arrests in what it called the nation’s first criminal case against digital health company executives over allegations that those executives caused illegal prescriptions for controlled substances to be ordered by way of telehealth visits.

While the Justice Department has previously brought charges in telehealth cases involving things like orthotic braces or genetic testing, a case against digital health executives involving telehealth-prescribed controlled substances is a first.

According to the Justice Department, two executives of a company called Done Global Inc. caused their company to provide prescriptions for controlled substances like Adderall through a telehealth system that the Justice Department claims to be illegal. That system involved patients subscribing to Done in exchange for access to controlled substances. Once subscribed, Done allegedly found ways to generate wrongful orders for controlled substances for those subscribers. According to the Justice Department, Done’s prescribers were not given full information about patients and were given a short amount of time to evaluate patients’ needs for controlled substances. Done then allegedly discouraged follow-up care for patients by restricting compensation to prescribing physicians for that treatment. That, combined with a feature that allowed Done subscribers to obtain automatic refills of their orders, is alleged to have resulted in healthcare fraud, according to the Justice Department.

Moreover, the Justice Department alleges that upon learning of the existence of the investigation, the two Done executives then deleted documents and communications.

For these acts, the Justice Department claims to have obtained an indictment charging both executives with a drug dealing conspiracy, a healthcare fraud conspiracy, and charges relating to their alleged obstruction of justice.

What should healthcare providers engaging in telehealth learn from this prosecution?

These charges are different than prior Justice Department cases in the telehealth and controlled substances areas. The novelty of these charges should be noted by all healthcare providers who engage in telehealth in several specific ways.

First, for providers prescribing controlled substances via telehealth, these charges show that adherence to federal and state laws relating to the manner in which controlled substances are to be prescribed may not be enough. It is notable that in the press release announcing the charges, the Justice Department did not allege that the executives skirted state regulations relating to how controlled substances are to be prescribed in the telehealth context. Those state and federal regulations are oftentimes onerous. There is no indication here that those were violated. And so the first lesson is that adherence to the structures of regulations is not enough when the underlying system in place is deemed to be fundamentally wrong by some other way.

Second, the fundamental wrong the Justice Department alleges is that the Done executives restricted prescribers’ access to patients, and then created financial incentives to cause prescribers to continue prescribing without follow-up evaluations. In other words, the executives are accused of tacitly deceiving prescribers and then using money to encourage the prescribers to agree to be deceived. Healthcare providers should always think carefully about any system that both restricts physicians’ ability to interact with patients and financially disincentivizes patient treatment. That combination radically increases the risk of enforcement.

Third, while healthcare executives paying prescribers money to impact their ordering habits typically face Anti-Kickback Statute charges, the two Done executives were not charged in that way. Anti-Kickback Statute prosecutions are challenging for many reasons, but here the Justice Department avoided Anti-Kickback Statute charges in favor of a drug-dealing conspiracy, which in some respects is an easier charge for the Justice Department to prove at trial than the Anti-Kickback Statute, and often an easier concept for jurors to understand.

Fourth, because of the novelty of the charges and recent case law on controlled substance drug-dealing cases brought under Title 21, the prosecution could have a series of challenges ahead of them. The 2022 Supreme Court Ruan case significantly increased the hurdles the Justice Department must clear in order to prosecute physicians for writing wrongful controlled substance prescriptions, and a case in which the Justice Department alleges a conspiracy to cause physicians to wrongfully prescribe controlled substances could face similar hurdles. Little is known about the type of evidence the Justice Department has relating to these two executives, but unless the Justice Department has cooperating physicians who plan to testify that they wrote prescriptions they knew to be illegal, or would have known to be illegal if given full access to patient files, then the prosecution will face significant challenges on the drug conspiracy count.

Fifth, and this is a takeaway for everyone everywhere who learns they are the target of a federal investigation, do not delete documents. In today’s world, not only is it wrong and illegal, but you just are not likely to get away with it. Federal law enforcement has trained teams that are capable of forensically examining devices to detect deletions. Moreover, if the government has a cooperator on the inside, the government could already have your documents, or could easily learn if you begin deleting things. And in fraud investigations, where a person’s mindset if almost always the most important question for a jury, deleting documents is a surefire signal to a jury that you knew that what you were doing was wrong. Here, Done was not operating in the shadows. It has a website that lays out exactly what they were doing. Do fraudsters openly market their plan? No. But fraudsters do delete documents when caught. Here, deleting documents could end up being the prosecution’s best evidence for a guilty mindset.

Sixth, and finally, this case does not mean that telehealth is bad or wrong or risky. Practicing telehealth in legal and responsible says is still very much a great thing for patients and our health system as a whole. But healthcare innovators should be mindful in crafting new models for providing healthcare of the risks associated with restricting the physician-patient relationship, especially when physicians are being paid to order specific products or drugs. But telehealth, practiced wisely, is not an overly risky concept.

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Photo of Jonathan Porter Jonathan Porter

Jonathan uses his years of experience as a federal prosecutor to guide clients through the challenges associated with government investigations and regulatory compliance.

Jonathan brings to clients a thorough working knowledge of how the U.S. government targets and pursues criminal and civil investigations,

Jonathan uses his years of experience as a federal prosecutor to guide clients through the challenges associated with government investigations and regulatory compliance.

Jonathan brings to clients a thorough working knowledge of how the U.S. government targets and pursues criminal and civil investigations, particularly those involving the healthcare industry. He is a former Assistant U.S. Attorney for the Southern District of Georgia, and in that capacity, he brought charges against numerous individuals and companies under federal law, including criminal charges of health care fraud, wire fraud, and violation of the Anti-Kickback Statute, and civil complaints alleging violations of the False Claims Act.

At the Department of Justice, Jonathan was a key member of multiple international health care fraud takedowns, in which Jonathan charged dozens of doctors, nurses, and other licensed medical professionals, along with marketers and health care executives for alleged participation in healthcare fraud schemes involving billions of dollars in false billings. In total, these charges resulted in more than 30 guilty pleas plus a conviction in the nation’s first trial of a medical professional charged as part of Operation Brace Yourself, which Jonathan first-chaired. Jonathan also was active in dozens of civil investigations brought under the False Claims Act. Jonathan resolved tens of millions of dollars in civil settlements and judgments for False Claims Act violations.

Jonathan also advises clients on a range of regulatory issues, along with the development and implementation of corporate compliance programs. He uses his unique perspective as a former AUSA, providing a prosecutor’s eye for detail in helping clients understand how DOJ and other agencies view compliance, particularly in light of the changing standards for compliance as outlined in the DOJ’s Evaluation of Corporate Compliance Programs (ECCP) and implemented in the Department’s white-collar crime enforcement initiative.