The Department of Justice announced on Thursday that three of the nation’s largest health insurance companies allegedly paid hundreds of millions of dollars in illegal kickbacks to three large insurance broker organizations in exchange for enrollments into the insurers’ Medicare Advantage plans.
The complaint, filed under the False Claims Act, accuses Aetna Inc. and affiliates, Elevance Health Inc. (formerly known as Anthem), and Humana Inc., as well as broker organizations eHealth, Inc. and an affiliate, GoHealth, Inc., and SelectQuote Inc., of engaging in the activity from 2016 to 2021.
Insurance brokers are supposed to act as unbiased stewards to help Medicare beneficiaries choose a Medicare Advantage plan that best meets their needs. But the Justice Department claims the brokers allegedly directed Medicare beneficiaries to the plans offered by insurers that paid brokers the most in kickbacks, regardless of the suitability of the Medicare Advantage plans for the beneficiaries.
According to the complaint, the broker organizations provided incentives to their employees and agents to sell plans based on the insurers’ kickbacks, set up teams of insurance agents who could sell only those plans, and at times refused to sell Medicare Advantage plans of insurers who did not pay sufficient kickbacks.
The complaint also alleges that Aetna and Humana each conspired with the brokers to discriminate against Medicare beneficiaries with disabilities whom they perceived to be less profitable. Aetna and Humana allegedly threatened to withhold kickbacks to pressure brokers to enroll fewer disabled Medicare beneficiaries in their plans. In response to the financial incentives, brokers and their agents allegedly rejected referrals of disabled beneficiaries and strategically directed disabled beneficiaries away from Aetna and Humana plans.
“It is concerning, to say the least, that Medicare beneficiaries were allegedly steered towards plans that were not necessarily in their best interest – but rather in the best interest of the health insurance companies,” said U.S. Attorney Leah B. Foley for the District of Massachusetts in the announcement. “The alleged efforts to drive beneficiaries away specifically because their disabilities might make them less profitable to health insurance companies are even more unconscionable. Profit and greed over beneficiary interest is something we will continue to investigate and prosecute aggressively. This office will continue to take decisive action to protect the rights of Medicare beneficiaries and vulnerable Americans.”
The lawsuit, United States ex rel. Shea v. eHealth, et al., No. 21-cv-11777, was originally filed under the qui tam or whistleblower provisions of the False Claims Act. The provisions allow private parties to file an action on behalf of the United States and receive a portion of the recovery. The False Claims Act permits the United States to intervene in and take over the action. If a defendant is found liable for violating the False Claims Act, the United States may recover three times the amount of its losses plus applicable penalties. The whistleblower is also entitled to a portion of the recovery.