The District of Massachusetts held a hearing on defendants’ motion to dismiss in United States ex rel. Shea v. eHealth, Inc., et al. (No. 21-cv-11777-DJC), a notable False Claims Act (FCA) case examining the intersection of Medicare Advantage marketing, broker compensation, and FCA and Anti-Kickback Statute (AKS) compliance.
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 industry-wide 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 governed the broker marketing and compensation structure; the payments neither exceeded fair market value nor induced fraud; and the government did not adequately plead causation or identify a claim submitted for payment under its discrimination theory.
The relator originally filed this lawsuit in 2021 under seal, and the government partially intervened in May 2025. During this period and continuing today, broker compensation in the Medicare Advantage space has faced increased scrutiny from both Congress and CMS. At oral...
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