A federal False Claims Act (FCA) case examining the intersection of Medicare Advantage marketing, broker compensation, and FCA and Anti-Kickback Statute (AKS) compliance cleared a critical hurdle. In United States ex rel. Shea v. eHealth, Inc., et al., Chief Judge Denise Casper of the U.S. District Court for the District of Massachusetts denied defendants’ motions to dismiss as to Counts I through VII, allowing the government’s core FCA claims to proceed, while dismissing only the government's unjust enrichment claim in Count VIII. The government’s claims—alleging Medicare Advantage (MA) health insurers paid kickbacks to brokers to incentivize enrollments for certain beneficiaries while deterring enrollments of disabled beneficiaries—will now move into the discovery phase.
As we previously noted, the government and relator alleged that leading Medicare Advantage Organizations (MAOs) and e-brokers engaged in improper administrative and marketing payment practices designed to steer beneficiaries to certain Medicare Advantage plans, while also discriminating against disabled beneficiaries to prevent their enrollment in those plans—practices the government claimed amounted to kickbacks in violation of the FCA and AKS. In their motions to dismiss, the defendants argued that the government’s novel theories reach well outside the bounds of both statutes, as the Centers for Medicare & Medicaid Services (CMS) has long been responsible for regulating permissible broker...
A federal False Claims Act (FCA) case examining the intersection of Medicare Advantage marketing, broker compensation, and FCA and Anti-Kickback Statute (AKS) compliance cleared a critical hurdle....