The Department of Justice is suing three of the nation’s largest health insurance companies — Aetna Inc. and affiliates, Elevance Health Inc. (formerly known as “Anthem”), and Humana Inc., CVS Health Corporation, and three large insurance broker organizations — eHealth, Inc. and an affiliate, GoHealth, Inc., and SelectQuote Inc. for violating the False Claims Act (“FCA”) and Antikickback Statute. In the second complaint of its kind in recent months, the Justice Department complaint in ex rel. Shea v. eHealth, et al., No. 21-cv-11777 (D. Mass. May 5, 2025) accuses the defendants of paying or receiving kickbacks to steer Medicare Advantage enrollees to the defendant insurers.

Medicare Advantage Antikickback & False Claims Rules

Under the Medicare Advantage (“MA”) Program, also known as Medicare Part C, Medicare beneficiaries may choose to enroll in health care plans (MA plans) offered by private insurance companies, like defendants Aetna, Anthem, and Humana. Many Medicare beneficiaries rely on insurance brokers to help them choose an MA plan that best meets their individual needs.

Under the FCA, private parties can file an action on behalf of the United States and receive a portion of the recovery. The FCA permits the United States to intervene in and take over the action, as it has done here. If a defendant is found liable for violating the FCA, the United States may recover three times the amount of its losses plus applicable penalties

In a lawsuit originally filed by a former eHealth employee as a qui tam whistleblower complaint, the Justice Department charges that the defendant insurers paid hundreds of millions of dollars in illegal kickbacks to the defendant brokers in exchange for enrollments into the insurers’ Medicare Advantage plans from 2016 through at least 2021. Rather than acting as unbiased stewards, the Justice Department charges that 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.

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.

The Justice Department also alleges that Aetna and Humana each conspired with the broker defendants to discriminate against Medicare beneficiaries with disabilities whom they perceived to be less profitable. Aetna and Humana allegedly did so by threatening to withhold kickbacks to pressure brokers to enroll fewer disabled Medicare beneficiaries in their plans.

The Justice Department further alleges that, in response to these financial incentives from Aetna and Humana, the defendant brokers or their agents rejected referrals of disabled beneficiaries and strategically directed disabled beneficiaries away from Aetna and Humana plans.

Commonwealth Care Alliance Prior Kickback Settlement

The eHealth suit against the defendants is not first of its kind. In January, 2025, the Justice Department announced that MA Program insurer Commonwealth Care Alliance, Inc. (“CCA”) agreed to pay $520,355.65 to resolve allegations that Reliance HMO, Inc. (“Reliance”), a company CCA acquired in 2022, violated the FCA by providing cash payments to induce the referral of Medicare beneficiaries to enroll in Reliance’s Medicare Advantage Plan in violation of the Anti-Kickback Statute after CCA voluntarily self-disclosed the conduct to the U.S. Attorney’s Office.

In April 2019, CMS authorized Reliance to operate a MA plan for Medicare beneficiaries in Michigan, with beneficiaries receiving coverage starting in January 2020. On March 31, 2022, CCA announced the completion of its acquisition of a 70% stake in Reliance. After the acquisition, CCA identified concerns regarding certain marketing-related outreach and payments that Reliance agents had made to personnel at physician practices. In particular, CCA disclosed two schemes.

First, from April 12, 2019, through December 22, 2020, Reliance provided cash payments to healthcare professionals and administrative staff in physician practices, in exchange for providing Reliance with the contact information for patients who had agreed, through executing so-called “permission to contact” cards, to be contacted by Reliance regarding its MA plan offerings.

Second, in November 2019, prior to Reliance’s MA plan becoming active, Reliance paid each of four physicians and physician practices $2,500, which Reliance characterized as advances on “coordination of care” services to be provided by the physicians to beneficiaries when the MA plan became active in 2020.

The Justice Department alleged these payments were intended to induce the referral, recommendation, or arrangement of enrollment of Medicare beneficiaries in Reliance’s MA plan. Such payments, the United States alleges, were impermissible kickbacks in violation of the False Claims Act.

The CCA settlement resolved these charges. The settlement gave CCA credit for voluntarily self-disclosing this conduct to the Justice Department; taking remedial measures, including terminating the employees directly involved with the decision to offer the prohibited payments; and providing the United States with a detailed written statement describing its investigation, along with other supplemental information to assist the United States in its investigation.

Alleged Medicare Advantage Insurer Risk Adjustment Padding

Medicare Advantage insurers also are under investigation by the Justice Department for other alleged abuses. The Justice Department recently has investigated certain Medicare Advantage insurers for alleged manipulation of risk data to increase their capitated payments from Medicare. For Instance, the Justice Department recently sued MA Program insurer Independent Health Association and its affiliate, Independent Health Corporation (collectively, “Independent Health”) for allegedly illegally manipulating risk data used to set risk adjustment rates paid by Medicare to their Medicare Advantage plans in United States ex rel. Ross v. Independent Health Association et al., No. 12-CV-0299(S) (WDNY). To settle the litigation, Independent Health agreed to pay up to $98 million to resolve allegations that it violated the False Claims Act by knowingly submitting or causing the submission of invalid diagnosis codes to Medicare for Medicare Advantage Plan enrollees to increase payments that Independent Health received from Medicare. Under the terms of the settlement, Independent Health promised to make guaranteed payments of $34,500,000 and contingent payments of up to $63,500,000 on behalf of itself and DxID, which ceased operations in 2021. Its Chief Executive Officer separately agreed to pay $2,000,000. In addition, Independent Health entered into a five-year corporate integrity agreement (“CIA”) with HHS-OIG that requires among other things, that Independent Health hire an Independent Review Organization to annually review a sample of Independent Health’s Medicare Advantage patients’ medical records and associated internal controls to help ensure appropriate risk adjustment payments.

The Justice Department touts all of these and other investigations and enforcement actions against Medicare Advantage insurers as demonstrating its commitment to hold Medicare Advantage insurers and brokers accountable for kickbacks or other misconduct. In the Justice Department’s press release about the e-Health litigation, 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.”

Risks For Insurers, Brokers, Health Plans & Fiduciaries

These and other actions send a strong warning to insurers and brokers to abstain from prohibited risk adjustment, kickbacks, or other prohibited conduct. Brokers and insurers also should keep in mind that these activities- whether in connection with the sale of Medicare Advantage or other insurance products Past history demonstrates that these activities carry risks beyond the Antikickback Statute and False Claims Act. They also can create exposures under other federal or state laws. The 2004 bid rigging prosecution of Marsh & McClennon by then New York Attorney General Elliott Spitzer is illustrative. On October 14, 2004, then New York State Attorney General Eliot Spitzer sued Marsh & McClennan and Marsh, Inc. (“Marsh”) for bid rigging and violation of various other state laws through its compensation arrangements between Marsh and several insurance companies, and bidding manipulation by Marsh. The largest U.S. insurance broker at the time, Marsh agreed in January 2005 to pay $850 million and end improper bid-rigging in a civil settlement with Spitzer. Attorney General Spitzer also brought criminal charges against individuals involved, some of which produced several guilty pleas. The last of these criminal prosecutions dragged on until 2011, when the New York Attorney General finally dismissed the remaining criminal charges against former Marsh executive marketing director William Gilman and former Marsh global placement director Edward McNenney. Marsh and others also faced charges in other states and private litigation from the scandal.

Kickbacks or other inappropriate compensation arrangements between insurers, brokers or other plan service providers also can create issues for health plan fiduciaries, sponsors, brokers and advisors. Self-insured health plan sponsors, fiduciaries, administrators and their consultants, brokers and insurers also should keep in mind that practices like those challenged in the Justice Department actions also are likely to raise concerns under the fiduciary responsibility and prohibited transaction rules of the Employee Retirement Income Security Act of 1974 (“ERISA”). Consequently, employer and other plan sponsors, their fiduciaries, and their brokers and advisors may wish to visit with experienced legal counsel about the advisability of conducting due diligence into the past, current, or future plan vendor relationships with their own programs.

The Justice Department is touting the lawsuit as an example of its commitment to hold Medicare Advantage insurers and brokers accountable for kickbacks or other misconduct. In the Justice Department’s press release about the action, 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.”

 More Information Or Help

We hope this update is helpful. For more information about these or other health or other employee benefits, human resources, insurance, or health care legal developments, please contact the author, Cynthia Marcotte Stamer, via e-mail or telephone at (214) 452-8297.

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About the Author

Cynthia Marcotte Stamer is a Martindale-Hubble AV-Preeminent (highest/top 1%) practicing attorney recognized as a “Top Woman Lawyer,” “Top Rated Lawyer,” and “LEGAL LEADER™” in Health Care Law and Labor and Employment Law; among the “Best Lawyers In Dallas” in “Labor & Employment,” “Tax: ERISA & Employee Benefits,” “Health Care” and “Business and Commercial Law recognized for her experience, scholarship, thought leadership and advocacy on health and other employee benefits, insurance, healthcare, workforce, HIPAA and other data and technology and other compliance in connection with her work with health care and life sciences, employee benefits, insurance, education, technology and other highly regulated and performance-dependent clients.

Board certified in labor and employment law by the Texas Board of Legal Specialization and a Fellow in the American College of Employee Benefits Counsel, Ms. Stamer is nationally recognized for her decades of leading edge experience on the design, sponsorship, administration and defense of health and other employee benefit, workforce, insurance, healthcare , data and technology and other operations to promote legal and operational compliance, reduce regulatory and other liability and promote other operational goals.

Along with her decades of legal and strategic consulting experience, Ms. Stamer also contributes her leadership and experience to many professional, civic and community organizations. She currently serves as Co-Chair of the ABA Real Property Trusts and Estates (“RPTE”) Section Welfare Plan Committee, Co-Chair of the ABA International Section International Employment Law Committee and its Annual Meeting Program Planning Committee, Chair Emeritus and Vice Chair of the ABA Tort Trial and Insurance (“TIPS”) Section Medicine and Law Committee, and Chair of the ABA Intellectual Property Section Law Practice Management Committee. She also has served as Scribe for the Joint Committee on Employee Benefits (“JCEB”) annual agency meetings with the Department of Health and Human Services and JCEB Council Representative, International Section Life Sciences Committee Chair, RPTE Section Employee Benefits Group Chair and a Substantive Groups Committee Member, Health Law Section Managed Care & Insurance Interest Group Chair, as TIPS Section Medicine and Law Committee Chair and Employee Benefits Committee and Workers Compensation Committee Vice Chair, Tax Section Fringe Benefit Committee Chair, and in various other ABA leadership capacities. Ms. Stamer also is a former Southwest Benefits Association Board Member and Continuing Education Chair, SHRM National Consultant Board Chair and Region IV Chair, Dallas Bar Association Employee Benefits Committee Chair, former Texas Association of Business State, Regional and Dallas Chapter Chair, a founding board member and Past President of the Alliance for Healthcare Excellence, as well as in the leadership of many other professional, civic and community organizations. She also is recognized for her contributions to strengthening health care policy and charitable and community service resolving health care challenges performed under PROJECT COPE Coalition For Patient Empowerment initiative and many other pro bono service involvements locally, nationally and internationally.

Ms. Stamer is the author of many highly regarded works published by leading professional and business publishers, the ABA, the American Health Lawyers Association, and others. Ms. Stamer also frequently speaks and serves on the faculty and steering committee for many ABA and other professional and industry conferences and conducts leadership and industry training for a wide range of organizations.

For more information about Ms. Stamer or her health industry and other experience and involvements, see http://www.cynthiastamer.com or contact Ms. Stamer via telephone at (214) 452-8297 or via e-mail here.

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