In late September 2024, Oak Street Health, a subsidiary of CVS Health since 2023, agreed to pay $60 million to resolve allegations of an illegal Medicare Advantage patient recruitment scheme. The whistleblower who reported the illegal activity will receive $9.9.

The Case

In December of 2020 (later amended in April 2023), a whistleblower filed a complaint in the United States District Court alleging that Oak Street Health violated the False Claims Act by paying kickbacks to third-party insurance agents in exchange for recruiting seniors to Oak Street Health’s primary care clinics. According to the allegations, in 2020 Oak Street Health developed a program designed to increase patient membership in their clinics. Pursuant to the program, third-party insurance agents contacted seniors who were in or eligible for Medicare Advantage. The insurance agents delivered marketing messages touting Oak Street Health, and then referred interested seniors to an Oak Street Health employee via a three-way phone call or an electronic transfer. In exchange, the insurance agents would receive $200 per beneficiary referred, incentivizing agents to recommend Oak Street Health rather than a plan chosen for the best interests of the senior. This kickback scheme took place between September 2020 and January 2022.

The Settlement

Oak Street Health settled the case for $60 million. “Kickbacks, in any form, have no place in our federal healthcare system” said Acting US Attorney Morris Pasqual for the...

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