Oak Street Health, a Chicago-based company and a subsidiary of CVS Health, has agreed to pay $60 million to settle allegations that it violated the False Claims Act by paying kickbacks to third-party insurance agents in exchange for referring seniors to its primary care clinics.
The U.S. government alleged that between September 2020 and December 2022, Oak Street Health used its "Client Awareness Program" to incentivize insurance agents with payments of around $200 per referred Medicare Advantage beneficiary. These referrals were made through "warm transfers" or electronic submissions. The payments allegedly influenced the agents to prioritize financial gain over the best interests of seniors, leading to false claims submitted to Medicare.
“This case underscores our commitment to holding accountable health care providers that seek to profit from illegal kickbacks,” said Principal Deputy Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “We are focused on eliminating fraudulent practices that compromise patient care and undermine federal health care programs.”
Acting U.S. Attorney Morris Pasqual of the Northern District of Illinois emphasized, “Kickbacks have no place in our federal healthcare system. This settlement ensures that patient choice is prioritized over profit.”
The settlement resolves claims brought under the whistleblower provisions of the False Claims Act by Joseph Stinson, who will receive $9.9 million as part of the resolution. The investigation was conducted with the cooperation of the U.S. Attorney’s Office for the Northern District of Illinois, the Department of Health and Human Services Office of Inspector General, and the FBI.
Oak Street Health’s settlement reflects the government’s ongoing focus on combating health care fraud, particularly in federal programs like Medicare.
