DOJ-HHS FCA Working Group Revived

Posted on August 10, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Health Capital Consultants, LLC

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On July 2, 2025, the Department of Justice (DOJ) and Department of Health & Human Services (HHS) announced during the American Health Law Association (AHLA) Annual Meeting that the agencies have reestablished a Working Group to “strengthen” their ongoing collaboration, specifically as relates to the False Claims Act (FCA).

This Health Capital Topics article discusses the Working Group’s priorities and the implications for providers. (Read more…)

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OAK STREET HEALTH: Agrees to Pay $60M to Resolve Alleged False Claims Act Liability for Paying Kickbacks to Insurance Agents in Medicare Advantage Patient Recruitment Scheme

Posted on May 16, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Oak Street Health, headquartered in Chicago and a wholly-owned subsidiary of CVS Health since 2023, has agreed to pay $60 million to resolve allegations that it violated the False Claims Act by paying kickbacks to third-party insurance agents in exchange for recruiting seniors to Oak Street Health’s primary care clinics.

Part C: https://medicalexecutivepost.com/2024/05/03/eschew-medicare-advantage-part-c-plans-now/

The Anti-Kickback Statute prohibits anyone from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce referrals of patients or to provide recommendations of items or services covered by Medicare, Medicaid and other federally funded programs. Under the Medicare Advantage (MA) Program, also known as Part C, Medicare beneficiaries have the option to obtain their health care through privately-operated insurance plans known as MA plans. Some MA Plans contract with health care providers, including Oak Street Health, to provide their plan members with primary care services.

Medicare Advantage Rates: https://medicalexecutivepost.com/2025/04/28/medicare-advantage-plan-rates-substantially-increased-for-2026/

The United States alleged that, in 2020, Oak Street Health developed a program to increase patient membership called the Client Awareness Program. Under the Program, third-party insurance agents contacted seniors eligible for or enrolled in Medicare Advantage and delivered marketing messages designed to generate interest in Oak Street Health. Agents then referred interested seniors to an Oak Street Health employee via a three-way phone call, otherwise known as a “warm transfer,” and/or an electronic submission.

MEDICARE PART C: Humana Used A.I. Tool from UnitedHealth to Deny Medicare Advantage Claims

In exchange, Oak Street Health paid agents typically $200 per beneficiary referred or recommended. These payments incentivized agents to base their referrals and recommendations on the financial motivations of Oak Street Health rather than the best interests of seniors. The settlement resolves allegations that, from September 2020 through December 2022, Oak Street Health knowingly submitted, and caused the submission of, false claims to Medicare arising from kickbacks to agents that violated the Anti-Kickback Statute.

US Department of Justice: https://www.justice.gov/archives/opa/pr/oak-street-health-agrees-pay-60m-resolve-alleged-false-claims-act-liability-paying-kickbacks

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DOJ Intervenes in Fraud & Abuse Case Against Tennessee Hospital

Posted on September 6, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Health Capital Consultants, LLC

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On July 26, 2024, the U.S. Department of Justice (DOJ) filed a complaint in intervention against Murphy Medical Center, doing business as Erlanger Western Carolina Hospital, and Chattanooga-Hamilton County Hospital Authority, doing business as the Erlanger Health System and Erlanger Medical Center. The government’s complaint, filed in the U.S. District Court for the Western District of North Carolina, alleges that Erlanger violated the Stark Law, and subsequently submitted false claims to the Medicare program in violation of the False Claims Act (FCA).

CITE: https://www.r2library.com/Resource

This Health Capital Topics article reviews the allegations underlying the case. (Read more...) 

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DOJ: Antitrust Reportedly Investigating UnitedHealth Group

Posted on May 2, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Health Capital Consultants, LLC

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On February 27, 2024, the Wall Street Journal (WSJ) reported that the Department of Justice (DOJ) has launched an antitrust investigation into UnitedHealth Group (UHG), the owner of the biggest health insurer in the U.S. and the leading manager of drug benefits and one of the largest networks of physician groups. This investigation comes as the Biden administration’s antitrust enforcers have ramped up investigations into some of the biggest U.S. companies, including Amazon, Apple, and Google.

CITE: https://www.r2library.com/Resource

This Health Capital Topics article reviews the reported government investigation. (Read more…)

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HEALTHCARE PRIVATE EQUITY: Federal Regulators Launch Inquiry

Posted on April 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Health Capital Consultants, LLC

On March 5th, 2024, the Department of Justice’s (DOJ’s) Antitrust Division, the Federal Trade Commission (FTC), and the Department of Health and Human Services (HHS), announced the launch of a multi-agency inquiry – in the form of a request for information (RFI) and public workshop – focusing on the increasing control of private equity (PE) and other corporations over the healthcare industry.

This Health Capital Topics article discusses the agencies recent actions and how it appears to be in line with the government’s recent moves to crack down on anti-competitive actions in healthcare. (Read more…)

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RITE AID: Gets it Financially Wrong?

Posted on September 20, 2023 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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Last quarter, interest expense grew to $65 million from $48 million last year, contributing to Rite Aid reporting a net loss of $306.7 million despite sales of $5.6 billion. Management forecasts a net loss of between $650 million and $680 million for the full fiscal year 2024. Rite Aid’s losses leave it with little financial wiggle room to navigate two significant headwinds: a looming lawsuit and increasing losses from theft.

RISK MANAGEMENT: https://www.routledge.com/Risk-Management-Liability-Insurance-and-Asset-Protection-Strategies-for/Marcinko-Hetico/p/book/9781498725989

In March, for example, the Department of Justice filed a civil suit against Rite Aid, claiming pharmacists “repeatedly filled prescriptions for controlled substances with obvious red flags” and alleging it “intentionally deleted internal notes about suspicious prescribers.”

The lawsuit continues a string of high-profile cases brought against companies contributing to the spread of the opioid epidemic. Opioid drugmakers Purdue Pharma, Endo Pharmaceuticals, and Mallinckrodt have already declared bankruptcy because of lawsuits. Walgreens and CVS Health have inked opioid settlements valued at $5.7 billion and $4.9 billion over the past year.

How much Rite Aid would need to pay to settle its suit remains to be seen, but a billion-dollar price tag isn’t unfathomable, given Walgreens and CVS’ outcomes. 

CITE: https://www.r2library.com/Resource

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Understanding Medical Practice Anti-Trust Risks

Posted on March 26, 2014 by Dr. David Edward Marcinko MBA MEd CMP™

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Medical Risk Management

By Dr. Charles F. Fenton III JD

fenton* Monopolistic risks are reduced when more than a few networks or contracts are available in the local area for excluded medical providers to join.

  • * Fee schedule MCO contracts, per se, are not generally considered price fixing, provided the doctor providers have not conspired with one another to set those prices. Moreover, network pricing schedule should not spill over into the non-network patients.

Some Issues:

  • Individual providers may be excluded from a network if there is a rational reason to do so. It is much more difficult to exclude a class of providers, than it is to exclude an individual provider.
  • A safety zone can be created if networks or other contractual plans require a substantial amount of financial risk-sharing among plan participants, since Stark II laws have been relaxed. Such zones have been created by the Department of Justice (DOJ) and Federal Trade Commission (FTC), in recent policy statements.
  • The FTC and DOJ are not likely to challenge an exclusive provider IPA that includes no more than 20-25% of the doctors within the panel, who share financial risk. Such panels are likely to fall within a Safe Harbor.
  • Tying arrangements (e.g.: the requirement to buy one item/service in order to buy another item/service) are suspect if not reasonably justified. For example, a patient should not be required to obtain a brace prescription from a specific provider, in order to purchase the device from a laboratory that the doctor owns.
  • Non-exclusive provider panels will not usually be challenged if no more than 30% of the providers are included (another Safe Harbor provision). Physician networks are often analyzed according to four criteria: (1) anti-competitive effects, (2) relevant local markets, (3) pro-competitive effects, and (4) collateral agreements.Further anti-trust considerations consist of analyzing
  • Market Power. This consists of two factors: (1) Geographic Power and (2) Product Power.

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Flag MOney

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  • Geographic Power is difficult to define in today’s environment. In the past, the geography that was analyzed when medical practices merged was the immediate neighborhood. Currently, the geographical area could consist of an entire metropolitan area. In the past, individual patients would often seek a physician whose office was close to work or home. Now they seek a physician based on inclusion in a health plan. Now, health plans choose physicians based on needs within an entire metropolitan area.
  • Product Power relates to the specific service being performed. There are two products in today’s environment: (1) Primary Care and (2) Specialty Care. Since there are so many primary care physicians in practice, it would be difficult for all but the largest group to acquire product power.

Assessment

It is easier for medical specialists to develop product power. However, certain specialists may never be able to obtain product power.

For example, foot care is provider by many types of physicians. Primary care physicians, emergency physicians, chiropractors, physical therapists, orthopedic surgeons, nurse practitioners, and podiatrists all provide foot care. Therefore, it would be difficult, even for a large group of podiatrists to obtain significant product power.

Conclusion

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