CVS subsidiary Oak Street Health fined $60M for kickback scheme
CVS-owned primary care chain Oak Street Health has agreed to a $60 million settlement to resolve allegations it participated in an illegal kickback scheme, the U.S. Department of Justice (DOJ) announced.
The DOJ said from September 2020 to December 2022, the physician group allegedly paid insurance agents $200 per-patient kickbacks to entice their plan members, specifically seniors, to sign up for services at Oak Street.
Patients were connected to a three-way call with a provider and the insurance agent to seal th deal through a “warm transfer,” the DOJ said.
The scheme specifically targeted patients enrolled in Medicare Advantage plans, and reimbursement funds from those patients were allegedly used to pay the kickbacks—meaning, government funds were illegally allocated.
Oak City called the initiative the “Client Awareness Program” and apparently were not shy about offering the kickbacks to insurance agents. The program shut down in 2022. CVS Health acquired Oak Street in May 2023, after the kickbacks for referrals stopped.
“Kickbacks impose hidden costs on the federal health care system and compromise medical choice and decision-making,” Special Agent in Charge, Mario Pinto of the Department of Health and Human Services Office of the Inspector General, said in a statement. “Working determinedly with our law enforcement partners, HHS-OIG will continue to protect the integrity of federal health care programs, and we encourage the public to come forward with information about violative conduct.”
As part of the settlement, Oak Street admits it “knowingly submitted, and caused the submission of, false claims to Medicare arising from kickbacks to agents” in violation of federal law, the DOJ said.
A whistleblower tipped the DOJ off about the scheme under provisions of the False Claim Act. That individual, Joseph Stinson, is set to receive a $9.9 million reward from the settlement fund.
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