Special Fraud Alert: Suspect Payments in Marketing Arrangements Related to Medicare Advantage and Providers

On Dec. 11, 2024, the OIG issued a Special Fraud Alert (Alert) related to certain fraud and abuse risks associated with marketing arrangements between Medicare Advantage Organizations (MAOs) and health care professionals (HCPs), as well as arrangements between HCPs and agents and brokers for Medicare Advantage (MA) plans. This Alert follows recent U.S. Department of Justice scrutiny of HCP marketing arrangements with agents, brokers and others, and MAO marketing arrangements with HCPs. As a result, it is imperative that HCPs, MAOs, agents, brokers and others carefully structure their relationships to ensure compliance with federal laws.

The Alert addresses “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 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.” Within the Alert, the OIG expresses concern that such arrangements could result in “unfair competition and improper steering of Medicare enrollees to a particular MA plan or HCP based on lucrative incentives for the HCP or a third-party rather than the most appropriate plan or HCP for the enrollee.”

Payments by MAOs to HCPs in Exchange for Referrals

The OIG considers there to be a substantial risk of fraud and abuse when MAOs, directly or indirectly, pay remuneration (e.g., gift cards or in-kind payments) to HCPs or their staff in exchange for referring or recommending patients to the MAO’s particular plans. The OIG emphasizes that while “Centers for Medicare & Medicaid Services (CMS) regulations allow HCPs to engage in certain limited marketing or communications-related functions on behalf of an MAO,” an HCP cannot accept compensation for engaging in such functions.

The OIG is concerned that such payments could “result in individuals being enrolled in MA plans that fail to meet the enrollees’ needs,” and could be used to “selectively target individuals for enrollment who are expected to result in increased profits to the MAO, or conversely, avoid or discourage enrollment of individuals who are expected to be more costly.”

Payments by HCPs to Agents and Brokers in Exchange for Referrals

The OIG also considers there to be a risk of fraud and abuse when marketing arrangements involve “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.” While the OIG recognizes the important role that agents, brokers and HCPs play in guiding individuals through the MA plan and HCP selection process, the OIG expressed concern over the “potential for unscrupulous agents, brokers, and HCPs to abuse their position of trust” and unduly influence an enrollee to select an HCP that does not suit the enrollee’s particular needs.

Suspect Characteristics

The OIG identifies a list of “suspect characteristics” related to such marketing arrangements that, taken together or separately, could suggest that an arrangement presents a heightened risk of fraud and abuse. The OIG, however, emphasized that the “list is illustrative, not exhaustive, and the presence or absence of any one of these factors is not determinative of whether a particular arrangement would be grounds for legal sanctions.”

• MAOs, agents, brokers or any other individual or entity offering or paying remuneration:
  • Such as bonuses or gift cards to HCPs or their staff in exchange for referring or recommending patients to a particular MAO or MA plan
  • To HCPs that is disguised as payment for legitimate services but is actually intended to be payment for the HCP’s referral of individuals to a particular MA plan
  • To HCPs or their staff in exchange for sharing patient information that may be used by the MAOs to market to potential enrollees
  • 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
  • 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
  • To recommend that HCP to a Medicare enrollee or refer an enrollee to the HCP
  • That varies with the number of individuals referred to the HCP