The Department of Justice has filed a sweeping lawsuit against Humana, Aetna, and Anthem, along with Medicare Advantage brokers eHealth, GoHealth, and SelectQuote, alleging a multi-year scheme involving unlawful kickbacks and discriminatory practices against disabled MA enrollees.
According to the May 1 complaint filed in the U.S. District Court for the District of Massachusetts, the insurers paid hundreds of millions of dollars from 2016 through at least 2021 to the brokers in exchange for preferential treatment, including steering enrollees toward their MA plans and away from competitors, regardless of the quality of the plans. The DOJ filed the lawsuit based on a whistleblower complaint initially filed by a former eHealth employee under the False Claims Act.
“Brokers repeatedly directed Medicare beneficiaries to the plans offered by insurers that paid them the most money, regardless of the quality or suitability of the insurers’ plans,” the complaint says. “They incentivized their agents to sell those plans; set up teams of agents who could sell only those plans; and at times ‘shut off,’ or refused to sell, plans of insurers who did not pay or did not pay enough in kickbacks. According to the lawsuit, one broker executive said about Aetna, for example, ‘more money will help drive more sales [be]cause your product is dog sh[*]t.'”
Humana allegedly paid tens of millions of dollars annually to each broker in disguised “marketing” fees, with the actual intent to incentivize MA enrollment and reduce competition. The DOJ claimed that these payments created “pods” of agents who sold only Humana plans and offered the payer first priority in broker call-routing systems. In return, brokers were expected to hit specific enrollment targets and shift market share toward Humana.
The complaint includes an alleged example where a Humana employee explained the strategy: “We began deploying co op in 2017 to create pods (semi exclusivity) to scale MA growth in a challenged product year.”
“When discussing a purported ‘marketing’ agreement with Humana, one eHealth executive joked that Humana was paying eHealth ‘$15M/year for a [web]site that drives 15 enrollments per year,” the complaint says. “CMS will surely never figure that one out. . . . Luckily the govt are generally morons.'”
Humana is also accused of conspiring with brokers to reduce the proportion of disabled beneficiaries enrolling in its plans, which are typically less profitable due to higher medical costs. The DOJ alleges that Humana’s executives knew these practices violated federal anti-discrimination laws.
Aetna allegedly made similar kickback payments under the guise of administrative or marketing service agreements. According to the complaint, an eHealth executive said Aetna’s marketing payment model was “not even a little compliant” and added, “I’m pretty sure if Aetna got audited by CMS, they’d be fu[**]ed.”
According to the DOJ, Aetna coordinated with brokers to screen out or divert disabled individuals from enrolling in its plans using data filters and call-routing strategies, thereby violating anti-discrimination statutes.
Aetna also allegedly paid performance-based “bonuses” and “rewards” beyond CMS-mandated caps on broker compensation, linking the extra payments to enrollment volume.
“Aetna designed and executed its marketing programs and compensation to brokers to comply with CMS rules, and we continue to believe that we did so,” a CVS Health spokesperson told Becker’s. “We remain committed to providing high quality insurance products for diverse individual needs and strive to ensure that each individual is in the best plan for their needs. We dispute the allegations and intend to defend ourselves vigorously.”
Anthem (now Elevance Health) is accused of paying illegal kickbacks primarily to GoHealth and eHealth. Unlike Aetna and Humana, Anthem’s strategy allegedly centered on avoiding explicit language in contracts while internally acknowledging that payments were in exchange for sales.
“Anthem executives often referenced the ‘underlying business agreement’ of money for sales,” the complaint states. The DOJ claims that these arrangements were designed to manipulate market share while avoiding regulatory scrutiny.
“We are confident that our health plans have complied with and continue to comply with the Centers for Medicare & Medicaid Services (CMS), marketing and broker compensation regulations, rules and guidelines,” an Elevance spokesperson told Becker’s. “We intend to vigorously fight the allegations in the complaint.”
The government further alleges that the insurer-broker arrangements led to the submission of thousands of false claims to CMS, violating the Anti-Kickback Statute and various anti-discrimination provisions embedded in MA contracts.
The DOJ is seeking triple damages, civil penalties for each false claim submitted, and other remedies under the False Claims Act.
“Since being notified of the government’s investigation in January 2022, eHealth has fully cooperated with the Department of Justice to demonstrate that we conduct our business affairs consistent with federal regulations,” a spokesperson for the broker told Becker’s. “eHealth strongly believes the claims are meritless and remains committed to vigorously defending itself.”
