On December 11, 2024, OIG issued a Special Fraud Alert to warn the industry about the fraud and abuse risks associated with abusive Medicare Advantage (MA) organization (MAO) and agent and broker relationships with healthcare professionals (HCPs). OIG’s Special Fraud Alert specifically focuses on two categories of remuneration that OIG states implicate the federal Anti-Kickback Statute (AKS) and have led to recent settlements under the False Claims Act: (1) “payments from MAOs to HCPs or their staff relating to MA plan marketing and enrollment” and (2) “payments from HCPs (including companies that employ healthcare professionals or contract with them like management services organizations) to agents, brokers, and others in exchange for referring Medicare enrollees to a particular HCP.”
With respect to the first category of remuneration, OIG highlights three types of arrangements that involve substantial risk. The first fact pattern involves MAOs directly or indirectly paying remuneration (which can include gift cards or in-kind payments) to HCPs or their staff in exchange for referring or recommending patients to the MAOs’ plans or a specific plan. This is the fact pattern that the government alleged in DOJ’s $4.2 million settlement with MCS Advantage that OIG cites to in the Special Fraud Alert. In the press release for that settlement, the government alleged that the MAO gave numerous gift cards to provider administrative assistants costing a total amount of $42,575. Based on the number of gift cards allegedly given, the average gift card value appears to have been $25. The government alleged the gift cards were given to induce the administrative assistants to refer, recommend, or arrange for beneficiaries to enroll in the MAO’s plans. The second fact pattern involves an MAO paying healthcare professionals or their staff, which payments can be monetary, gift cards, or in-kind, to selectively target profitable beneficiaries (i.e., healthy beneficiaries). The third fact pattern involves the reverse - an MAO paying healthcare professionals or their staff to avoid or discourage enrollment of more costly beneficiaries.
With respect to the second category of remuneration, OIG warns the industry of the fraud and abuse risk involving HCPs paying agents, brokers, or others to recommend that HCP to a particular MA enrollee or to refer the MA enrollee to the HCP. OIG cites to the DOJ’s settlement with Oak Street Health for $60 million as an example of such an alleged arrangement. OIG notes that payments are sometimes made by the HCP to the agents or brokers to designate the healthcare professional as the MA enrollee’s primary care provider under the plan.
OIG states that these various arrangements can cause inappropriate beneficiary steering, are anticompetitive, and can cause harm to MA enrollees. According to OIG, the abusive arrangements described in the Special Fraud Alert also may implicate the federal AKS as well as “criminal, civil, or administrative liability under other Federal laws including…OIG’s exclusion authority related to kickbacks, the Civil Monetary Penalties Law provisions for kickbacks, OIG’s authority to assess civil monetary penalties for contracting organization misconduct, the criminal healthcare fraud statute, and the False Claims Act.”
OIG identifies the following list of “suspect characteristics” in these types of marketing arrangements involving HCPs:
- “MAOs, agents, brokers, or any other individual or entity offering or paying HCPs or their staff remuneration (such as bonuses or gift cards) in exchange for referring or recommending patients to a particular MAO or MA plan.
- MAOs, agents, brokers, or any other individual or entity offering or paying HCPs remuneration that is disguised as payment for legitimate services but is actually intended to be payment for the HCPs’ referral of individuals to a particular MA plan.
- MAOs, agents, brokers, or any other individual or entity offering or paying HCPs or their staff remuneration in exchange for sharing patient information that may be used by the MAOs to market to potential enrollees.
- MAOs, agents, brokers, or any other individual or entity offering or paying remuneration to HCPs that is contingent upon or varies based on the demographics or health status of individuals enrolled or referred for enrollment in an MA plan.
- MAOs, agents, brokers, or any other individual or entity offering or paying remuneration to HCPs that varies based on the number of individuals referred for enrollment in an MA plan.
- HCPs offering or paying remuneration to an agent, broker, or other third party that is contingent upon or varies based on the demographics or health status of individuals enrolled or referred for enrollment in an MA plan.
- HCPs offering or paying remuneration to an agent, broker, or other third party to recommend that HCP to a Medicare enrollee or refer an enrollee to the HCP.
- HCPs offering or paying remuneration to an agent, broker, or other third party that varies with the number of individuals referred to the HCP.”
Notably, this Special Fraud Alert only focuses on remuneration that involves HCPs. However, OIG includes a footnote stating that the agency “recognizes that other categories of remuneration, such as payments from MAO MAOs to agents, brokers, and others, may also result in abusive arrangements that could implicate the Federal [AKS]” and “OIG has received significant and credible reports of potential violations in these areas and will consider future guidance regarding payments from MAOs to agents, brokers, and others.” This could be foreshadowing future enforcement actions and/or additional guidance to the industry.
OIG’s Special Fraud Alert can be found here.
