DOJ Sues Major Medicare Advantage Insurers and Brokers Over Alleged Kickbacks

The U.S. Department of Justice has filed a lawsuit against leading health insurance providers and brokerage firms alleging illegal kickback schemes to influence the enrollment of members into specific Medicare Advantage plans.

The complaint targets subsidiaries of CVS Health Corp., Elevance Health Inc., and Humana Inc., as well as brokers including eHealth, Inc., GoHealth, Inc., and SelectQuote Inc.

The lawsuit, which originates from a whistleblower complaint filed in 2021 and covers activities from 2016 through 2021, claims that brokers directed agents to promote Medicare Advantage plans that paid kickbacks while impeding the sale of other insurance plans.

Additionally, the complaint asserts that some insurers pressured brokers to limit enrollments of disabled individuals in their plans. Medicare Advantage plans provide private insurance alternatives within the government Medicare system, which serves mainly Americans aged 65 and older, with over half of Medicare beneficiaries currently enrolled in these plans.

Congressional investigations into insurer-broker commission structures have taken place previously, and the U.S. Attorney's Office in Massachusetts had subpoenaed the involved broker companies in 2022. The market reacted swiftly to the lawsuit's disclosure, with shares of all named insurers and brokers declining.

CVS Health has indicated plans to contest the lawsuit, while Elevance, Humana, and the brokers have yet to issue public statements. This legal action highlights ongoing regulatory scrutiny over commission practices, compliance with kickback laws, and the ethical conduct of payer-provider referrals in the Medicare Advantage market.