Medicare Advantage Risk Selection: Steering Disabled Beneficiaries Away From Enrollment

Medicare Advantage disability discrimination through broker steering can begin in the call queue. In the government’s broker steering complaint, Aetna and Humana allegedly tied payments to enrolling fewer people with disabilities. The instructions allegedly reached the quoting tool, the call queue and the enroll button. Change who gets through, and you change who the plan has to cover.

The government’s complaint describes alleged enrollment payments from Aetna, Humana and Anthem, now Elevance Health, to eHealth, GoHealth and SelectQuote from 2016 through at least 2021. Its disability-discrimination allegations concern Aetna and Humana. A former eHealth employee brought the whistleblower case, and the Justice Department joined it. This part of Medicare Advantage fraud follows the enrollment instructions and the money attached to them.

What Is Favorable Risk Selection?

Favorable risk selection means enrolling people who cost less to cover than others with similar risk factors. That makes the enrollment mix a source of profit.

Medicare Advantage pays a plan a fixed amount per member per month, adjusted for the member’s expected healthcare costs. As the HHS Office of Inspector General explains the payment formula, the risk score multiplies the plan’s base payment rate. Higher expected costs bring higher payments so plans can cover people who need more health care.

The financial result still depends on what those members actually cost. In its 2023 paper, Medicare Advantage Enrolls Lower-Spending People, Leading to Large Overpayments, the USC Schaeffer Center found that people with lower spending than others with similar risk factors were more likely to move from traditional Medicare into Medicare Advantage. The broker complaint alleges something more deliberate: instructions, payments and controls intended to keep particular people out.

A sales instruction can show who was supposed to be turned away, and a payment condition can show why.

What U65 Meant in the Sales Reports

U65 was the companies’ shorthand for Medicare beneficiaries under sixty-five who qualified through disability. In the complaint, it becomes a business target: tracked by broker, reported by week and discussed against the cost of covering those members.

The government alleges that Aetna’s medical benefit ratio for under-sixty-five beneficiaries enrolled by eHealth exceeded 130%. That ratio measured medical claims against the payments Aetna received from the Centers for Medicare & Medicaid Services. By the government’s account, the company was spending more on those members’ care than it received to cover them.

According to the complaint, Aetna’s response reached its sales team. Executives pressed for fewer disabled enrollees, and eHealth reported that Aetna preferred margin over sales. The government alleges that Humana reached the same financial conclusion about its disabled members and pressed its brokers to reduce their share of enrollments. Medicare Advantage’s enrollment rules require plans to accept eligible beneficiaries regardless of disability. The alleged workaround was to stop the sale before the application arrived.

A Payment Condition Kept Out of the Contract

Aetna allegedly made additional marketing money depend directly on eHealth’s disability mix. The government’s complaint quotes an Aetna sales executive explaining the arrangement to senior management in October 2016:

The complaint says the payment condition communicated to eHealth was a U65 mix of 27% or below. The following day, an Aetna executive suggested leaving that percentage out of the contract. The condition belonged in the working relationship. The written agreement was supposed to look different.

The government describes the same pressure at GoHealth: Humana’s marketing funds allegedly depended on limiting disabled enrollment. A GoHealth manager asked about the bonus, and a colleague explained that the condition had been delivered verbally. It was absent from the contract.

What Happened to the Caller

The alleged restrictions went into the systems agents used to quote plans and receive calls. A sales target became something a beneficiary could encounter without ever knowing it existed.

The Plan Stayed Visible but Enrollment Was Blocked

The complaint describes eHealth collecting a caller’s date of birth before generating quotes, with the ability to turn carriers on or off by market and product. In June 2016, it alleges, eHealth filtered Aetna plans out of its quoting tool based on the beneficiary’s state and date of birth.

An earlier email described another approach. An eHealth executive said the company would leave Aetna’s plans visible in the quoting tool but disable the enroll button. A plan could remain on the screen while the agent lost the means to enroll the caller in it.

The Phone Menu Sorted People Before an Agent Answered

The government also describes HealthPlanOne’s work with Humana. HealthPlanOne appears in these allegations as another broker, outside the companies named as defendants in the government’s complaint.

The complaint quotes an August 2016 email in which HealthPlanOne told Humana it was testing an automated phone menu that asked callers whether they were over or under sixty-five. It described a daily limit of 25% for under-sixty-five leads and routing calls elsewhere once that target was reached. Discussing an earlier email about external routing, the government alleges:

The insurer saw a mix report. The person trying to compare health plans heard a phone ring.

The Mix Reports Showed the Result

The complaint says disabled beneficiaries accounted for 52% of eHealth’s Humana enrollments in 2016, falling to 13% to 18% at the beginning of 2021.

In a separate exchange about HealthPlanOne, the complaint says, a Humana sales manager celebrated the lower disability mix and said the share could rise to 40% if the company wanted more sales. A number that can be raised on request is a number somebody is setting.

The Instructions Reached Beyond the Contract

The government’s complaint describes efforts to keep disability targets out of emails as well as contracts. In the complaint’s account, an eHealth executive told colleagues to raise it with lead partners on calls and keep it out of email, noting that discriminating against that traffic was against CMS regulations.

The complaint says lead vendors subsequently rejected under-sixty-five calls or stopped sending them to eHealth. That takes the alleged conduct beyond the insurer and the broker’s own sales floor, into the businesses supplying prospective customers.

There were also objections from inside the sales operation. The government’s complaint quotes an Aetna sales executive warning against asking partners to curtail U65 sales in November 2019 and refusing to supply talking points on the subject in January 2021. It alleges that management continued the pressure after the earlier objections.

What the Marketing Money Bought

The broker compensation system pays for new enrollments and renewals. The Centers for Medicare & Medicaid Services describes an initial payment followed generally by half as much in subsequent years when the member stays enrolled. The agency’s third-party marketing organization definition includes compensated lead generation, marketing, sales and enrollment work. The call’s path can therefore run through several businesses before anyone recommends a plan.

The allegation here is that additional payments bought enrollment commitments and a preferred disability mix while contracts described marketing services. The whistleblower’s amended complaint describes production commitments kept on spreadsheets and conveyed by phone, outside the written agreements.

The government’s complaint gives another example involving Anthem and GoHealth. GoHealth objected to putting an enrollment target into a marketing-funds agreement unless Anthem took responsibility for the resulting liability. The executed agreement left the target out. According to the complaint, the enrollment bargain survived the change in wording.

The Beneficiary at the End of the Sale

The same complaint describes harm when a broker steered someone into a plan. In a May 2019 example that eHealth’s compliance personnel substantiated, an agent persuaded a beneficiary receiving cancer treatment to leave original Medicare and TRICARE for a Humana plan. TRICARE had covered the treatment co-pays. The beneficiary then faced $17,000 in costs because the treating providers were outside the new plan’s network.

That example concerns the plan somebody was sold. The disability-filtering allegations concern access to the sale itself. Both put the broker’s instructions between the beneficiary and the coverage decision.

Selection Can Run in Either Direction

WellCare’s 2012 settlement announcement included allegations of cherry-picking healthy patients to avoid future costs. The settlement also covered other Medicare and Medicaid allegations.

The direction reversed at Plaza Rehab and Nursing Center and Citadel Consulting Group. In their 2022 settlement, they admitted that staff often moved residents out of Medicare Advantage without consent. Citadel set a monthly disenrollment quota. Original Medicare usually paid the facility better. The money favored a different coverage choice, and the quota followed it.

Payment incentives also reach beyond the cost of claims. Adjusting Medicare Advantage Star Ratings for Socioeconomic Status and Disability, published in the American Journal of Managed Care in 2018, found disability associated with worse performance on many clinical measures. Its conclusion explains why adjusting those measures matters:

What does the business reward its staff and partners for doing with patients who need more care?

How Can Turning Away a Caller Lead to a False Claim?

The government alleges that Aetna and Humana claimed payment for enrolled members while falsely promising compliance with rules against disability discrimination. The claims concerned the people the plans enrolled, while the alleged discrimination kept others out. The complaint also alleges that the brokers knowingly caused the insurers to make those false promises through their discriminatory enrollment practices. Taxpayers paid plans that, according to the complaint, were turning away people they had promised to accept.

The useful evidence joins the instruction to what happened next: a payment condition, the lead partner told to reduce a category of callers, the quoting rule, the enrollment mix report and the money that followed. A contract can name a service while the spreadsheet measures a different result. The discrepancy is where an insider’s knowledge becomes valuable.

Unsupported diagnosis cases follow the information used to raise payment for an enrolled member. This case follows the decisions about who reaches enrollment.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

The Enrollment Instructions Are Your Starting Point

If your job put you between an insurer’s disability target and the people trying to enroll, speak with our whistleblower experts about those instructions. We work with you to build the strongest case the evidence supports, bring in Medicare Advantage whistleblower lawyers who understand broker payments, and stay at your side throughout.