US Files False-Claim Complaint Against Health Insurance Companies, Brokers

According to the complaint, millions in kickbacks were allegedly paid out from 2016 through at least 2021.

Signage for Humana Inc. at a health facility in Queens, New York City, on Nov. 30, 2021. Andrew Kelly/Reuters

The Department of Justice filed a complaint under the False Claims Act on May 1 against three health insurance companies and three large insurance brokerage organizations, alleging that hundreds of millions of dollars in kickbacks were paid by the insurance companies to the brokers in exchange for enrollments into their Medicare Advantage plans.

The insurer defendants are Aetna Inc., and its affiliates, Humana Inc., and Elevance Health Inc. (formerly known as Anthem). The broker defendants are eHealth Inc. and one of its affiliates, GoHealth Inc., and SelectQuote Inc. According to the complaint, the kickbacks were allegedly paid out from 2016 through at least 2021.

DOJ explained in a press release that the Medicare Advantage Program beneficiaries may choose to enroll in plans offered by private insurance companies, and many of those beneficiaries rely on brokers to help them choose the best plan to meet their needs.

“Rather than acting as unbiased stewards, the defendant brokers allegedly directed Medicare beneficiaries to the plans offered by insurers that paid brokers the most in kickbacks, regardless of the suitability of the MA plans for the beneficiaries,” the DOJ stated in its press release.

“According to the complaint, the broker organizations incentivized 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 MA plans of insurers who did not pay sufficient kickbacks.”

DOJ also alleged that Humana and Aetna conspired with the brokers to discriminate against beneficiaries with disabilities deemed to be less profitable by allegedly threatening to withhold the kickbacks to the brokers.

“Health care companies that attempt to profit from kickbacks will be held accountable,” said Deputy Assistant Attorney General Michael Granston of the Justice Department’s Civil Division. “We are committed to rooting out illegal practices by Medicare Advantage insurers and insurance brokers that undermine the interests of federal health care programs and the patients they serve.”

The lawsuit was originally filed under whistleblower provisions under the False Claims Act, which permits the United States to intervene and take over the action.

“The alleged efforts to drive beneficiaries away specifically because their disabilities might make them less profitable to health insurance companies are even more unconscionable,” said U.S. Attorney Leah B. Foley for the District of Massachusetts. “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.”

According to the complaint, violations of the False Claims Act carry mandatory civil penalties per claim, and three times the amount of the government’s damages sustained due to the defendant’s actions.