Bad Romance: Major Medicare Advantage Insurers and Brokers Targeted for Marketing Kickbacks and Discrimination

On May 1, 2025, the United States partially intervened in a qui tam suit against three of the nation’s largest health insurance companies — Aetna, Anthem, and Humana (collectively referred to as the Defendant Insurers) — and three insurance brokers — eHealth, GoHealth, and SelectQuote (the Defendant Brokers) — in Massachusetts federal court relating to their participation in the Medicare Advantage program. The complaint alleges that these entities violated the Anti-Kickback Statute and, in turn, the False Claims Act.

First, the complaint alleges that from 2016 through at least 2021, the Defendant Insurers paid hundreds of millions of dollars in kickbacks to the Defendant Brokers to induce them to steer Medicare Advantage beneficiaries to the Defendant Insurers’ Medicare Advantage plans. The Defendant Brokers, in turn, solicited and received these kickbacks. The complaint alleges that although these arrangements were masked as payments for “marketing,” “co-op,” or “sponsorship” services, the true intent of the payments was to incentivize the Defendant Brokers to prioritize the Defendant Insurers’ plans over those of competitors, regardless of the quality or suitability of the plans for the beneficiaries.

Second, the complaint alleges that the defendants used deceptive marketing agreements to conceal the true intent of their transactions. These “marketing” agreements were structured to appear as payments for legitimate marketing services. For example, the contracts often referred to the reimbursement of marketing expenses (e.g., TV and radio advertisements, website hosting services) or the generation of leads and calls. Per the complaint, however, internal communications revealed that these agreements were smokescreens used to disguise the fact that the payments were actually conditioned on meeting certain Medicare Advantage policy enrollment quotas.

In many instances, the contracts avoided including any language about the quantities of policies to be sold or commitments to sell specific plans to comply with regulations on paper, while the actual agreements and expectations were discussed and agreed upon verbally or through other communications. The defendants allegedly knew that these agreements were a pretense and that the payments were directly tied to the number of enrollments.

Third, the complaint alleges that Aetna and Humana conditioned their payments on the Defendant Brokers limiting the enrollment of people with disabilities in their respective plans, and therefore discriminated against Medicare beneficiaries with disabilities in violation of federal law, which prohibits insurers from favoring the enrollment of healthier beneficiaries over those with disabilities. The Defendant Brokers allegedly rejected referrals of disabled beneficiaries, filtered telephone calls from them, and strategically directed them away from Aetna and Humana plans, reducing the ability of disabled Medicare beneficiaries to access and enroll in these plans.

The United States’ intervention in this case demonstrates its increased scrutiny over the Medicare Advantage Program and its focus on the involvement of both large insurance companies and downstream brokers. We at Qui Notes will continue to monitor developments in this area.

© Arnold & Porter Kaye Scholer LLP 2025 All Rights Reserved. This Blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.