On March 25th, Chief Judge Denise Casper of the U.S. District Court for the District of Massachusetts issued an eagerly-anticipated opinion in a high profile False Claims Act matter.
The Allegations in the eHealth Case
The case, initially brought by a whistleblower, alleges that numerous insurance companies offered and paid illegal kickbacks to brokers, in exchange for referrals. It also alleges that the insurers illegally discriminated against certain beneficiary applicants. The United States intervened in the case against eHealth and others in January 2025. The U.S. filed its own Complaint on May 1, 2025. The case is captioned United States ex rel. Shea v. eHealth, et al., 21-cv-11777-DJC (D. Mass.) (“the eHealth case”). The defendants include four brokerages (eHealth, GoHealth, CVS Health, and SelectQuote). The case also names three Medicare Advantage insurers — Aetna, Humana, and Elevance Health — as defendants.
We previously posted about this case and trends in Medicare Advantage enforcement here.
The Court Rejects Defendants’ Attempts to Dismiss the Case
Defendants had made numerous arguments to the Court in their bid to get the False Claims Act case dismissed. The Court, however, rejected each. As a result, the case will move forward into the information gathering stage known as discovery.
Regardless of its Name, a “Pay to Play” Scheme is Not Authorized by Medicare Rules
First, the Court tackled Defendants’ contention that the payments at issue were permissible under the program’s rules. The Court acknowledged that “marketing” payments are allowed. The Court noted, however, that the “pay-to-play scheme” alleged by the United States went far beyond “marketing” payments. Judge Casper noted that the fact that the defendant insurers and brokers used the term “marketing” in their contracts (allegedly to mask the true intent) is irrelevant. Citing a case litigated by our team, the Court noted that it is the “substance of the agreements and payments that control, not their form.”
A Medicare Advantage Plan is a Health Care “Item” or “Service” as used in the Anti-Kickback Statute
The Anti-Kickback Statute (“AKS”) prohibits (among other things) the knowing or willful offering or payment of “illegal remuneration” in exchange for a referral of “any item or service for which payment may be made in whole or in part under a Federal health care program.” 42 U.S.C. § 1320a-7b(b)(1)-(2). In the eHealth case, Defendants argued that an enrollment in a Medicare Advantage plan does not fit within this construct.
The Court rejected this position. Judge Casper relied on the statutory language, the legislative history, and prior court decisions to support her conclusion, including United States ex rel. Butler, et al., v. Shikara, et al., a case brought by two WLC clients.
Other courts facing similar facts have determined that steering beneficiaries to particular MAOs in exchange for kickbacks falls within the ambit of the AKS. See, e.g., United States ex rel. Butler v. Shikara, 748 F. Supp. 3d 1277, 1290, 1303 (S.D. Fla. 2024) (denying motion to dismiss FCA claim premised on AKS violation where “MAOs allegedly paid kickbacks and commissions to [healthcare provider and a field marketing organization] in exchange for steering Medicare patients to their organizations”); United States ex rel. Wilkins v. United Health Grp., Inc., 659 F.3d 295, 298-99 (3d Cir. 2011) (reversing dismissal as to AKS-based FCA claim where defendant MAO “illegally provid[ed] kickbacks . . . to a New Jersey medical clinic to induce the clinic to switch its patients to [defendant]”).
For these reasons, as argued by the government, MA plans can be considered as “item[s] or service[s]” for purposes of establishing remuneration under the AKS.
A Broker is in a Position to Influence a Beneficiary’s Choice of Medicare Advantage Plans
The intent of the party offering the alleged kickbacks is a critical element of an AKS case. As the Court noted, it is well established that an AKS violation can be found “so long as one purpose of the offer or payment is to induce . . . referrals.” Notably, the Court cited to numerous allegations within the U.S. Complaint to support such a conclusion. This includes enrollment-based targets and correspondence supporting that the payments’ intent was to induce referrals. Moreover, the Court distinguished a case cited by Defendants, noting that the brokers were not disconnected sales personnel.
Further, as argued by the government . . . Defendant Brokers were positioned to induce beneficiaries by virtue of their role in the MA program as the connective tissue between beneficiaries and available plans.
This influence over beneficiary choice is what prompted HHS OIG to issue a Special Fraud Alert about suspect payments flowing between brokers and other parties in the Medicare Advantage system.
The United States Alleged FCA Violations Under Two Theories
Finally, the Court turned to an issue that has been at the heart of many previous battles involving FCA claims predicated on AKS violations. As the Court noted:
[A]n AKS violation offers two theories of liability under the FCA: (1) liability under the 2010 amendment to the AKS, under which “an AKS violation that results in a federal health care payment is a per se false claim under the FCA,” Regeneron Pharms., Inc., 2020 WL 7130004, at *7 (quoting Guilfoile, 913 F.3d at 190), and (2) “false certification” liability, which attaches when a defendant falsely represents AKS compliance on a federal agency form, United States v. Regeneron Pharms., Inc., 793 F. Supp. 3d 261, 266 (D. Mass. 2025).
“Put simply, claims under the 2010 amendment run on a separate track than do claims under a false-certification theory.” United States v. Regeneron Pharms., Inc., 128 F.4th 324, 334 (1st Cir. 2025).
The Court began with the 2010 amendment theory. This theory requires a “but for” causation showing. The Court, however, found that the United States “alleges pages of claims submitted to the government by Defendant Insurers resulting from their business with Defendant Brokers over the relevant period, sufficiently linking those payments to the purported scheme.” Accordingly, the Court held that United States’ Complaint “sufficiently connects [Defendants’] conduct to claims for payment for purposes of establishing FCA liability.”
Next, Judge Casper concluded that the Complaint “provides factual allegations about contractual language and specific allegations as to the false certifications made by Defendant Insurers.” She also held that the U.S. had adequately alleged materiality and, as a result, “the complaint survives.”
The eHealth Case and Others Like It Will Shape Medicare Advantage Enforcement for Years to Come
As we have noted before, Medicare Advantage fraud enforcement remains a government priority. More specifically, cases involving brokers and kickbacks are an emerging area and one that we have significant experience handling. If you have information about possible Medicare Advantage fraud, please contact us for a free consultation. We have the expertise and desire to help.