The Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG) recently issued a special fraud alert focusing on questionable marketing arrangements related to Medicare Advantage (MA) plans. According to HHS-OIG, these arrangements often involve improper payments and referrals that can mislead Medicare enrollees into selecting plans or providers that may not meet their needs.

HHS-OIG identifies two primary types of suspect remuneration they believe “can result in abusive arrangements that could lead to improper steering, anticompetitive conduct, and other harms to enrollees and to the Medicare program”:

1. Payments from a Medicare Advantage Organization (MAO) to a healthcare professional (HCP) or its staff related to marketing and enrollment in MA plans
2. Payments from HCPs to agents, brokers, and others in exchange for referring Medicare enrollees to specific HCPs

Payments from MAOs to HCPs can lead to enrollees being placed in plans that do not meet their needs, sometimes without their consent. This can result in unfair practices, where certain enrollees are targeted based on profitability rather than medical necessity and which may involve discrimination against protected classes of enrollees.

Similarly, payments from HCPs to agents and brokers can influence enrollee decisions, often without their awareness of the financial incentives involved. This can lead to the increased risk of enrollees receiving suboptimal care or incurring higher costs.

Legal Framework

These arrangements raise concerns about compliance with healthcare fraud and abuse laws, including the federal Anti-Kickback Statute (AKS). The AKS prohibits offering or receiving remuneration to induce referrals for services reimbursable under federal healthcare programs. Violations can result in criminal and civil penalties, including exclusion from federal healthcare programs.

Other implicated laws include the Civil Monetary Penalties Law, the criminal healthcare fraud statute, and the False Claims Act, all of which aim to protect enrollees from improper referrals and ensure fair competition.

In its fraud alert, HHS-OIG highlights several characteristics of suspect marketing activities. These include, but are not limited to:

• Remuneration to HCPs or their staff (e.g., bonuses, gift cards) referring patients to a particular MAO or MA plan
• Remuneration to HCPs disguised as legitimate service payments but is intended to pay for the HCP’s referral of individuals to a particular MA plan 
• Payments for patient information used for marketing purposes
• Remuneration contingent on enrollee demographics or referral numbers

Key Takeaways

Healthcare providers should consider carefully reviewing their marketing arrangements to ensure compliance with federal laws. HHS-OIG’s alert serves as a critical reminder of the importance of maintaining ethical and legal standards in MA marketing practices. Providers should consider implementing robust compliance programs and conducting regular audits to detect and prevent suspect activities, safeguarding both their practice and their patients.