Medicare Advantage, or Medicare Part C, is an extremely popular alternate model to traditional Medicare. In traditional Medicare, the government directly pays for services provided, known as a “fee for service” model. Under the Medicare Advantage program, the government contracts with private insurers and pays them premiums to provide coverage for Medicare-eligible beneficiaries. In this “managed care” model, the amount the government pays does not necessarily depend on the utilization of services. Instead, a mathematical model is applied to “risk adjust” and pay higher premiums for riskier beneficiaries (generally older, sicker) than for healthier ones.

A recent, though common, healthcare fraud has focused on this risk adjustment process. Many insurers, including industry titans like UnitedHealth, Cigna, and Kaiser Permanente have faced allegations that they are gaming the system and making their beneficiary populations look sicklier than they really are. The Department of Justice, with the help of whistleblowers through the False Claims Act, has accused these companies of costing taxpayers billions. Several insurers have reached settlements with the government, and hundreds of millions have been recovered.

As those suits continue to make their way through the courts, a recent HHS-OIG Alert suggests that the government’s focus on fraud in the Medicare Advantage program is expanding beyond risk adjustment fraud, to include one of the most common schemes to defraud the traditional Medicare program: kickbacks.

The new Alert issues a warning to insurers, health care providers, and marketers such as insurance agents, to beware of running afoul of several laws.

Specifically, OIG warned against two potential schemes. First, it warned against payments from insurers to healthcare providers, and their staff, that relate to marketing their Medicare Advantage plans. Second, it warned against payments from healthcare providers to agents, brokers, and the like, in exchange for referring patients to a particular healthcare provider. OIG’s concern with both schemes centered on “improper steering, anticompetitive conduct, and other harms to enrollees and to the Medicare program.”

Though enforcement actions in this arena have been relatively rare compared to risk adjustment suits, there has been a recent example of each of these possible schemes. In 2022, an insurer in Puerto Rico agreed to pay $4.2 million to resolve allegations that it was providing gift cards to providers’ administrative assistants in exchange for those assistants steering patients to the insurer’s Medicare plan. And just this year, a provider group agreed to pay $60 million to resolve allegations that it was paying insurance brokers cash bonuses for every patient a broker could steer to using the group.

OIG’s alert provides a list of “suspect characteristics” that potential whistleblowers should be on the look out for. These include payment for sharing patient information that can be used in marketing, bonuses determined by the number of enrollments, and a litany of other scenarios.

The False Claims Act remains a potent tool to fight these kinds of frauds within the Medicare Advantage program. These laws allow whistleblowers to sue MA organizations and other healthcare entities that they allege are defrauding the government and recover damages and penalties on the government’s behalf. They also incentivize whistleblowers to act by offering financial awards and retaliation protections. Contact Whistleblower Partners today to learn more.