Here’s the latest on fraud cases announced by the Office of Inspector General and Department of Justice.
Oak Street Health to pay $60M over MA insurance agent kickbacks;
Chicago-based Oak Street Health, a wholly-owned subsidiary of CVS Health since 2023, agreed to pay $60 million to resolve allegations that it 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.
The Department of Justice (DOJ) alleged that, in 2020, Oak Street Health developed a program to increase patient membership through a program it coined the “Client Awareness Program.” Under the program, third-party insurance agents contacted seniors eligible for or enrolled in Medicare Advantage and delivered marketing messages designed to generate interest in Oak Street Health. Agents then referred interested seniors to an Oak Street Health employee via a three-way phone call, known as a “warm transfer,” and/or an electronic submission. In exchange, Oak Street Health paid agents typically $200 per beneficiary referred or recommended. These payments incentivized agents to base their referrals and recommendations on the financial motivations of Oak Street Health rather than the best interests of seniors.
The Anti-Kickback Statute prohibits anyone from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce referrals of patients or to provide recommendations of items or services covered by Medicare, Medicaid, and other federally funded programs. Under the Medicare Advantage (MA) Program, also known as Part C, Medicare beneficiaries have the option to obtain their health care through privately-operated insurance plans known as MA plans. Some MA Plans contract with health care providers, including Oak Street Health, to provide their plan members with primary care services.
The DOJ said the settlement resolves allegations that, from September 2020 through December 2022, Oak Street Health knowingly submitted, and caused the submission of, false claims to Medicare arising from kickbacks to agents that violated the Anti-Kickback Statute.
“Health care providers that attempt to profit from kickbacks will be held accountable,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department's Civil Division, in the announcement. “We are committed to rooting out illegal practices committed by Medicare Advantage providers, insurance agents and brokers that undermine the interests of federal health care programs and the patients they serve.”
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Joseph Stinson, who will receive $9.9 million.
Louisiana doc charged in $32.7M Medicare fraud scheme
A federal grand jury this week charged Michael W. Dole, M.D., 59, of Alexandria, La., who owned and operated an Alexandria pain management practice with in-house drug testing laboratory, for his role in a scheme to defraud Medicare of over $32.7 million by submitting claims for medically unnecessary definitive urine drug testing services.
According to court documents, on or around January 2010 through July 2023, Dole allegedly billed Medicare over $32.7 million for definitive testing of routinely over 22 classes of drugs in urine specimens from nearly all his patients, despite a lack of documentation of use or suspicion of use of those drugs by the patients. Medicare allegedly reimbursed Dole over $11.7 million for the medically unnecessary urine drug testing claims, and Dole used the proceeds of the fraud on personal expenses.