Telemedicine Legal Challenges: A New Frontier in U.S. Healthcare

by Mark Xiao and Alden Hey

The rise of telemedicine has transformed patient care by improving access and convenience. However, alongside any new technology come new legal and compliance challenges for healthcare providers, insurers, and technology companies. Issues such as billing fraud, state licensure, HIPAA compliance, and telehealth worker classification are now at the center of government investigations and False Claims Act enforcement. Below are some of the most important legal questions relating to the telehealth industry.

Which Federal Laws and Regulations Govern Telemedicine Services?

The legal framework around telehealth services is rapidly changing as lawmakers attempt to keep up with developments in the industry. Because of this, telehealth providers must remain up to date and compliant with an evolving federal statutory and regulatory landscape.

HIPAA

Telehealth services occur remotely, which results in data being recorded, maintained, and transmitted digitally. Therefore, maintaining the confidentiality of patients’ protected health information under the Health Insurance Portability and Accountability Act of 1996 (HIPAA)  is a top priority for the Department of Health and Human Services (HHS). HIPAA requires that telehealth providers conduct calls in a private setting and/or implement reasonable safeguards for confidentiality such as using a lowered voice and not using speakerphone.

The HIPAA compliance guidance also suggests that remote healthcare providers make certain disclosures to their patients regarding the potential privacy and security risks associated with using remote communication technology.  This includes explaining the importance of information privacy and potential risks associated with remote communication, disclosing any potential third party communication technology vendors, and directing patients to the HHS Office of Civil Rights complaint portal.

CMS

Following the COVID-19 pandemic, the Center for Medicare and Medicaid Services (CMS), temporarily expanded the list of which telehealth services Medicare and Medicaid patients could receive. Since then, this expanded list has been extended by Congress twice, however most of these extensions have recently expired on September 30, 2025. Some of these recently expired telehealth policies include:

• No location restrictions on non-behavioral/mental health care
• Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) being telehealth eligible
• Audio-only services if the patient is capable or consents to the use of video technology
• No in-person visit required within six months of the initial telehealth appointment

It is still unclear how their expiration will change reimbursement and billing for Medicare and Medicaid patients. CMS does however maintain and update a list of over 250 codes for telehealth services which telehealth service providers can consult in determining the eligibility of a given service.

DEA

Telehealth practitioners that seek to prescribe a Schedule II-V controlled substance without an in-person medical evaluation must be registered with the Drug Enforcement Agency (DEA). This allowance is set to expire on December 31, 2025, as it is part of an extension to the COVID-19 emergency telehealth provisions. Healthcare providers seeking to obtain federal registration must apply to both the Diversion Control Division of the DEA as well as any applicable agencies of states where they intend on prescribing controlled substances.

How Does State Licensure Affect Multi-State Telehealth Practices?

The state telehealth licensing process is under revision as part of a nationwide push to increase accessibility to telehealth services. As such, there are a variety of options when it comes to obtaining state licensure and practicing in one or multiple states including:

• Obtaining a full state license in one multiple states
• Checking license reciprocity between the state(s) in which you have a full license and the state(s) in which you are seeking to expand your practice
• Researching temporary practice laws in a given state if you do not intend to practice for an extended period of time
• Joining a license compact for your given role

License compacts allow for certain medical professionals to practice medicine across multiple states based on their licensure in a single member state. Compacts vary based on the field of medicine with examples of compacts including:

• Interstate Medical Licensure Compact for Physicians (IMLC)
• Nurse Licensure Compact (NLC)
• Audiology and Speech-Language Pathology Interstate Compact (ASLP-IC)
• Occupational Therapy Compact (OT compact)
• Physical Therapy Compact (PT compact)
• Psychology Interjurisdictional Compact (PSYPACT)
• Emergency Medical Services Compact (EMS Compact)

Ultimately, state licensure for telehealth providers is incredibly case-dependent and will require researching the laws for the state(s) you intend on practicing in.

What are the Leading Compliance Failures that result in Healthcare Fraud Investigations in Telehealth?

Fraud relating to telehealth billing for federal reimbursement has grown in recent years in parallel with the growth of the telehealth industry itself. The precise nature of these fraudulent billings varies from case to case. However, recent announcements by the Department of Justice (DOJ) highlight what tactics are most common among telehealth fraudsters.

 2025 Health Care Fraud Takedown

The 2025 Health Care Fraud Takedown announcement by the DOJ named 324 defendants with intended losses exceeding $14.6 billion. Within these announced charges are multiple cases that involved telehealth as either a primary or auxiliary tool within the alleged fraud. Almost all telehealth cases alleged violations of the False Claims Act (FCA) which prohibits fraudulent billing of federal agencies for services that were not delivered, not necessary, or not delivered in the capacity that they were represented to have been. Common FCA violations included retaining telehealth physicians for the purpose of prescribing unnecessary genetic testing, durable medical equipment or lab testing.

Alleged telehealth fraudsters were also commonly charged with violations of the Anti-Kickback Statute (AKS), which bans the payment or inducement of referrals for items or services payable by federal health care programs. AKS violations in the 2025 takedown relating to telehealth generally involved payment in exchange for prescriptions or referrals. Telehealth fraud frequently implicates both the FCA and AKS.

 Alabama Telehealth Fraud Scheme

A recent example of an FCA and AKS telehealth scheme is the case of Tommie Robinson, an Alabama doctor who pled guilty in August to prescribing medically unnecessary durable medical equipment (DME) and genetic testing in exchange for kickbacks. Enforcement agencies like the DOJ have increased their focus on the medical necessity of telehealth prescriptions due to the increasing prevalence of these kinds of schemes. As such, telehealth fraud schemes have become more complex, making the participation of whistleblowers a critical piece of enforcement efficacy.

 How does Miller Shah assist whistleblowers and healthcare workers reporting fraudulent telemedicine billing or misclassification schemes?

Miller Shah LLP is a leading law firm in the practice of assisting whistleblowers in reporting false claims to federal healthcare providers. If you believe that you have witnessed or participated in the billing of telemedicine services that were not performed or not medically necessary, Miller Shah can help you bring violators to justice and earn a percentage of the damages recovered. Additionally, our team of skilled attorneys has extensive experience protecting your anonymity and rights as a whistleblower, shielding you from retaliation.

Miller Shah can also represent you If you work in the telehealth industry and have been misclassified as an independent contractor. Common signs that you have been misclassified as a telehealth contractor include:

• Being required to adhere to a fixed daily or weekly schedule
• Productivity standards dictating how long you spend on appointments
• Restrictions being imposed on vacation time or time you send away from work
• Required attendance at regular company meetings
• Being expected to respond to requests or messages within a short period of time

If any of these cases apply to you, or if you are seeking legal representation in another matter, fill out the form attached below or call us toll-free at (866) 540-5505. After you have completed the form or call, one of our attorneys will reach out to you promptly about setting up a free consultation.