Dive Brief:
The Department of Justice is accusing three of the largest health insurers in the U.S. of paying brokers kickbacks for enrolling seniors in their Medicare Advantage plans.
CVS unit Aetna, Elevance and Humana paid brokers eHealth, GoHealth and SelectQuote hundreds of millions of dollars in return for signing people up for their MA coverage from 2016 to 2021 — regardless of the plans’ suitability for those members’ needs, according to the DOJ’s complaint filed Thursday.
Spokespeople for Humana and CVS said the companies are reviewing the DOJ’s complaint and did not provide detailed comment for this story, though CVS said it disagrees with the allegations. Elevance did not respond to a request for comment.
Dive Insight:
Seniors commonly rely on brokers when selecting coverage. Roughly a third of MA beneficiaries use the intermediaries to help them shop between plans, according to the Commonwealth Fund.
However, concerns have been rising about predatory behavior from the salesmen amid reports that some have been steering beneficiaries to certain plans in exchange for higher reimbursement from insurers, sparking rulemaking from the Biden administration attempting to curb the practice.
Now, the DOJ is alleging that Humana, CVS and Elevance — which cover 5.8 million, 4.2 million and 2.3 million people in MA, respectively — incentivized brokers to push enrollees to their coverage regardless if its provider network, pricing or other benefits was right for them.
They did so by paying hundreds of millions of dollars in illegal kickbacks, according to the DOJ.
The broker organizations then set up teams of agents who could sell only those plans, and occasionally even refused to sell plans from insurers that did not pay kickbacks, the complaint alleges.
“In public statements, [eHealth, GoHealth and SelectQuote] claimed to be ‘unbiased,’ ‘carrier-agnostic,’ and to ‘have your best interests in mind’,” the DOJ’s complaint reads. “In private, however, the Defendant 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.”
Aetna and Humana also threatened to withhold extra payments to pressure brokers into enrolling fewer disabled seniors into their MA plans, according to the DOJ.
Disabled individuals can carry higher medical costs and be more expensive for insurers to cover. However, federal law bars insurers from discriminating against beneficiaries based on their health status.
MA payers have come under increased fire from regulators and legislators in Washington over the last few years for profiteering in the privatized Medicare program, especially as the number of seniors in MA as compared to traditional Medicare grows. MA costs taxpayers more than traditional Medicare, in part due to insurer practices like upcoding members’ sicknesses that inflate their reimbursement, according to research.
The Biden administration took a tough stance against what it viewed as insurers gaming the system to garner higher payouts, enacting policies that have caused MA profits to fall for major payers last year.
At the same time, members of Congress have held hearings digging into MA payers’ coverage practices and accused plans of delaying and denying care to bolster profits. Top regulators in the Trump administration have also signaled interest in curbing puffed-up MA reimbursement.
Meanwhile, insurance groups point to MA’s popularity among seniors and argue the program provides better and more coordinated care than traditional Medicare.
