OIG Issues MA Plan Fraud Alert

The Office of Inspector General (OIG), U.S. Department of Health and Human Services, has issued a Special Fraud Alert warning about certain marketing schemes involving the Medicare Advantage (MA) program. These schemes involve questionable payments and referrals between Medicare Advantage plans, health care professionals ( HCPs) , and third-party marketers such as agents and brokers.

The Special Fraud Alert focuses on two types of remuneration that have been the subject of recent settlements under the False Claims Act and that implicate the Federal anti-kickback statute: (1) payments from Medicare Advantage Organizations (MAOs) to HCPs or their staff relating to MA plan marketing and enrollment; and (2) payments from HCPs (including payments from corporations that contract with or employ HCPs and payments from management services organizations with which HCPs contract) to agents, brokers, and others in exchange for referring Medicare enrollees to a particular HCP.

One area of risk involves MAOs, directly or indirectly, paying remuneration to HCPs or their staff in exchange for referring patients to the MAOs’ plans. For example, MAOs have provided gift cards or in-kind payments to HCPs and their office staff in exchange for those HCPs or their staff referring or recommending individuals for enrollment in a particular MA plan. In some cases, these tactics have resulted in individuals, sometimes without their consent, being enrolled in an MA plan when they wanted to stay in Original Medicare or another MA plan. Additionally, an MAO may use these payments to HCPs or their staff to selectively target individuals for enrollment that benefits the MAO

A second area of risk involves payments from HCPs to agents and brokers, such as payments from an HCP to agents and brokers to recommend that HCP to a particular MA enrollee or to refer the enrollee to the HCP. In some cases, HCPs make these payments to refer Medicare enrollees to the HCP to become designated as the primary care provider for the enrollee at their particular MA plan, which can carry a substantial financial benefit for the HCP. Enrollees are often unaware of these financial arrangements and may rely on the recommendation of an agent or broker in making HCP selection.

Abusive arrangements involving MAOs, agents, brokers, and HCPs may also lead to criminal, civil, or administrative liability under several Federal laws.

The OIG has developed a list of suspect characteristics related to arrangements involving the types of marketing activities described above. These characteristics, taken together or separately, could suggest that an arrangement presents a heightened risk of fraud and abuse.

• MAOs, agents, brokers, or any other individual or entity offering or paying HCPs or their  staff remuneration (such as bonuses or gift cards) in exchange for referring or recommending patients to a particular MAO or MA plan.
• MAOs, agents, brokers, or any other individual or entity offering or paying HCPs remuneration that is disguised as payment for legitimate services but is actually intended to be payment for the HCPs’ referral of individuals to a particular MA plan.
• MAOs, agents, brokers, or any other individual or entity offering or paying HCPs or their staff remuneration in exchange for sharing patient information that may be used by the MAOs to market to potential enrollees.
• MAOs, agents, brokers, or any other individual or entity offering or paying remuneration to HCPs that is contingent upon or varies based on the demographics or health status of individuals enrolled or referred for enrollment in an MA plan.
• MAOs, agents, brokers, or any other individual or entity offering or paying remuneration to HCPs that varies based on the number of individuals referred for enrollment in an MA plan.
• HCPs offering or paying remuneration to an agent, broker, or other third party that is contingent upon or varies based on the demographics or health status of individuals enrolled or referred for enrollment in an MA plan.
• HCPs offering or paying remuneration to an agent, broker, or other third party to recommend that HCP to a Medicare enrollee or refer an enrollee to the HCP.
• HCPs offering or paying remuneration to an agent, broker, or other third party that varies with the number of individuals referred to the HCP.

These practices, alone or in combination, represent potentially abusive practices that could

implicate various fraud and abuse laws. Additionally, these types of suspect practices could result in various harms to Medicare enrollees and should be scrutinized closely by any parties to such arrangements.