*

Insurers accused of violating False Claims Act, DOJ seeks

damages

*

Brokers allegedly steered patients to plans offering

highest

kickbacks

*

Kickbacks disguised as marketing or sponsorship payments,

DOJ

claims

(Adds comments from Elevance Health ( ELV ), eHealth in paragraphs 4-5)

By Nate Raymond

BOSTON, May 1 (Reuters) - The U.S. Department of Justice

accused three of the nation's largest health insurers of paying

hundreds of millions of dollars in kickbacks to brokers in

exchange for steering patients into the insurers' Medicare

Advantage plans.

In a complaint filed in Boston federal court on Thursday,

the Justice Department alleged that CVS Health's ( CVS ) Aetna,

Elevance Health ( ELV ) and Humana engaged in a vast

kickback scheme with insurance brokers eHealth,

GoHealth ( GOCO ) and SelectQuote ( SLQT ) from 2016 to 2021.

The lawsuit alleges the companies violated the False Claims

Act, which prohibits submitting a false claim to the government

for payment. The Justice Department is seeking unspecified

damages and penalties.

Aetna parent company CVS Health ( CVS ) and Humana in separate

statements said they would defend themselves vigorously.

Elevance Health ( ELV ) said it was confident its health plans complied

with federal regulations and guidelines.

GoHealth ( GOCO ) said the Justice Department's case was "full of

misrepresentations and inaccuracies," and eHealth called the

claims "meritless."

Medicare Advantage plans are offered by private insurers

that are paid a set rate by the U.S. government to manage

healthcare for older people looking for extra benefits not

included in regular Medicare coverage.

Many Medicare beneficiaries rely on insurance brokers to

help them choose insurance plans that meet their needs and

navigate the complexities of the Medicare Advantage program, the

Justice Department said.

The Justice Department said that rather than acting in an

unbiased manner and in the best interests of patients, the

brokers directed Medicare beneficiaries to plans offered by

insurers that paid them the most in kickbacks.

Those kickbacks were often disguised and referred to as

"marketing," "co-op," or "sponsorship" payments, according to

the complaint.

The lawsuit alleges the brokers incentivized their employees

and agents to sell plans based on the kickbacks and at times

refused to sell the Medicare Advantage plans of insurers that

did not pay them enough.

The Justice Department said Aetna and Humana also threatened

to withhold kickbacks to pressure the brokers to enroll fewer

patients with disabilities, whom the insurers viewed as less

profitable.

In a statement, U.S. Attorney Leah Foley of Massachusetts

called efforts to drive Medicare beneficiaries away because of

their disabilities "unconscionable."

Thursday's case began as a whistleblower lawsuit filed in

2021 under the False Claims Act, which allows whistleblowers to

sue companies to recover taxpayer funds paid out based on false

claims.

Such cases are filed under seal initially while the Justice

Department investigates the claims and decides whether to join

the case, which it did this week.