By Paige Minemyer
CVS’ Oak Street Health unit has agreed to pay a US$60 million settlement to resolve kickback allegations, the Justice Department announced on Wednesday.
The agency alleges that Oak Street paid insurance agents kickbacks in exchange for encouraging seniors to sign up for its services.
The DOJ said in a press release that Oak Street in 2020 established an initiative that aimed to boost patient numbers, called the Client Awareness Programme. Under this initiative, insurance agents would connect with Medicare Advantage enrollees and make the pitch to them about Oak Street.
If they were interested, they would be connected to the provider via a three-way call they referred to as a “warm transfer.” Agents were generally paid US$200 per referred member, DOJ said in the press release.
The settlement resolves kickback allegations from between September 2020 and December 2022, DOJ said.
“Health care providers that attempt to profit from kickbacks will be held accountable,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We are committed to rooting out illegal practices committed by Medicare Advantage providers, insurance agents and brokers that undermine the interests of federal health care programmes and the patients they serve.”
The allegations predate CVS’ acquisition of Oak Street, which closed in May 2023. CVS spokesperson Mike DeAngelis told Fierce Healthcare that the company cooperated closely with the DOJ and denies any wrongdoing.
He said the Client Awareness Programme was closed down more than two years ago.
“We are pleased to put this matter behind us so we can continue to focus on improving the quality of care for at risk older adults,” DeAngelis said.
