DoJ Files False Claims Act Charges Against Medicare Advantage Insurers & Brokers

The U.S. Congress passed the False Claims Act on March 2, 1863 to stem the corruption which was common during our Civil War.  It exacts treble damages from anyone presenting a false claim for payment or approval from the federal government.  The law includes a qui tam provision that allows people who are not affiliated with the government to file actions on behalf of the government and share in the treble damages upon conviction.  From time to time it gets applied to health care operations being paid by the federal government:

https://www.reuters.com/sustainability/us-files-false-claims-complaint-against-three-health-insurers-2025-05-01/

US accuses health insurers, brokers of Medicare Advantage kickback scheme
By Nate Raymond - May 1, 2025

Summary

*   Insurers accused of violating False Claims Act, DOJ seeks damages
*   Brokers allegedly steered patients to plans offering highest kickbacks
*   Kickbacks disguised as marketing or sponsorship payments, DOJ claims

BOSTON, May 1 (Reuters) - The U.S. Department of Justice accused three of the nation's largest health insurers of paying hundreds of millions of dollars in kickbacks to brokers in exchange for steering patients into the insurers' Medicare Advantage plans.

In a complaint, opens new tab filed in Boston federal court on Thursday, the Justice Department alleged that CVS Health's Aetna, Elevance Health, and Humana engaged in a vast kickback scheme with insurance brokers eHealth, GoHealth, and SelectQuote from 2016 to 2021.

The lawsuit alleges the companies violated the False Claims Act, which prohibits submitting a false claim to the government for payment. The Justice Department is seeking unspecified damages and penalties.

Aetna parent company CVS Health and Humana in separate statements said they would defend themselves vigorously. Elevance Health said it was confident its health plans complied with federal regulations and guidelines.

GoHealth said the Justice Department's case was "full of misrepresentations and inaccuracies," and eHealth called the claims "meritless."
Medicare Advantage plans are offered by private insurers that are paid a set rate by the U.S. government to manage healthcare for older people looking for extra benefits not included in regular Medicare coverage.

Many Medicare beneficiaries rely on insurance brokers to help them choose insurance plans that meet their needs and navigate the complexities of the Medicare Advantage program, the Justice Department said.

The Justice Department said that rather than acting in an unbiased manner and in the best interests of patients, the brokers directed Medicare beneficiaries to plans offered by insurers that paid them the most in kickbacks.

Those kickbacks were often disguised and referred to as “marketing,” “co-op,” or “sponsorship” payments, according to the complaint.
The lawsuit alleges the brokers incentivized their employees and agents to sell plans based on the kickbacks and at times refused to sell the Medicare Advantage plans of insurers that did not pay them enough.

The Justice Department said Aetna and Humana also threatened to withhold kickbacks to pressure the brokers to enroll fewer patients with disabilities, whom the insurers viewed as less profitable.

In a statement, U.S. Attorney Leah Foley of Massachusetts called efforts to drive Medicare beneficiaries away because of their disabilities "unconscionable."

Thursday's case began as a whistleblower lawsuit filed in 2021 under the False Claims Act, which allows whistleblowers to sue companies to recover taxpayer funds paid out based on false claims.

Such cases are filed under seal initially while the Justice Department investigates the claims and decides whether to join the case, which it did this week.