Justice Department sues Aetna, 2 other major insurers over kickbacks to brokers

Andrew Larson | Hartford Business Journal A sign outside Aetna's headquarters at 151 Farmington Ave. in Hartford.

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The U.S. Department of Justice has filed a lawsuit against Aetna Inc., Elevance Health (formerly known as Anthem) and Humana, accusing the insurers of paying kickbacks to brokers to direct Medicare Advantage patients to their plans

The complaint was filed May 1 under the False Claims Act.

All three insurers deny the allegations and say they will vigorously defend themselves against the claims.

The lawsuit also cites three large insurance broker organizations — eHealth Inc. and an affiliate, GoHealth Inc. and SelectQuote Inc.

The complaint claims that from 2016 through at least 2021, the insurers paid hundreds of millions of dollars in illegal kickbacks to the brokers in exchange for enrollments into the insurers’ Medicare Advantage plans.

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

The complaint claims that, rather than acting as unbiased stewards, the cited brokers directed Medicare beneficiaries to the plans offered by the defendant insurers who 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 complaint further alleges that Aetna and Humana each conspired with the defendant brokers to discriminate against Medicare beneficiaries with disabilities whom they perceived to be less profitable. Aetna and Humana are accused of threatening to withhold kickbacks to pressure brokers to enroll fewer disabled Medicare beneficiaries in their plans.

The complaint also 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.

“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.”

If a defendant is found liable for violating the FCA, the U.S. may recover three times the amount of its losses plus applicable penalties.

In an emailed statement, Aetna said it has “designed and executed its marketing programs and compensation to brokers to comply with CMS (Centers for Medicare & Medicaid Services) rules, and we continue to believe that we did so.”

The company added, “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.”

Elevance Health also provided a statement via email. It states that it and its affiliates “are confident that our health plans have complied with and continue to comply with the Centers for Medicare & Medicaid Services, marketing and broker compensation regulations, rules and guidelines. We intend to vigorously fight the allegations in the complaint.”

Humana issued a similar statement. “Humana strongly disagrees with the allegations in the complaint and we look forward to vigorously defending ourselves in the legal proceedings.”