DETROIT, Mich. – Commonwealth Care Alliance, Inc. (CCA) has agreed to pay $520,355.65 to resolve allegations that Reliance HMO, Inc., a company CCA acquired in 2022, violated the False Claims Act, 31 U.S.C. §§ 3729-3733, by providing cash payments to induce the referral of Medicare beneficiaries to enroll in Reliance’s Medicare Advantage Plan, in violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)(2).
CCA voluntarily self-disclosed the conduct to the U.S. Attorney’s Office, and the settlement acknowledges that CCA took significant steps, entitling it to credit for cooperating with the government’s investigation.
Under Medicare Advantage, also known as the Medicare Part C program, Medicare beneficiaries have the option of enrolling in managed care insurance plans called Medicare Advantage Plans (MA Plans). The Centers for Medicare & Medicaid Services (CMS) pays MA Plans a monthly capitated payment for each beneficiary who enrolls in one of their plans. The Anti-Kickback Statute prohibits parties who participate in federal healthcare programs from knowingly and willfully paying or receiving any remuneration in return for referring an individual to, or arranging for the furnishing of, any item or services for which payment is made by the federal healthcare programs.
CCA is a not-for-profit corporation, with its principal place of business in Boston, Massachusetts, engaged in offering MA Plans. In April 2019, CMS authorized Reliance HMO, Inc. (Reliance) to operate a MA plan for Medicare beneficiaries in Michigan, with beneficiaries receiving coverage starting in January 2020. On March 31, 2022, CCA announced completion of its acquisition of a 70% stake in Reliance. After the acquisition, CCA identified concerns regarding certain marketing-related outreach and payments Reliance agents had made to personnel at physician practices.
The United States alleges these payments were intended to induce the referral, recommendation, or arrangement of enrollment of Medicare beneficiaries in Reliance’s MA plan. Such payments, the United States alleges, were impermissible kickbacks in violation of the False Claims Act. The settlement announced today resolves these claims.
CCA voluntarily self-disclosed this conduct to the United States and received credit for its cooperation. In addition, CCA took remedial measures, including terminating the employees directly involved with the decision to offer the payments described above, and providing the United States with a detailed written statement describing its investigation, along with other supplemental information to assist the United States in its investigation.
“Our office encourages companies and individuals to make timely self-disclosures and take remedial measures to mitigate the harm from fraud that they discover,” said U.S. Attorney Dawn N. Ison.
Defendant: Commonwealth Care Alliance, Inc.
Criminal Charges: Violated the False Claims Act, 31 U.S.C. §§ 3729-3733, by providing cash payments to induce the referral of Medicare beneficiaries to enroll in Reliance’s Medicare Advantage Plan, in violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)(2).
City and State: Detroit, Michigan
Exact Date: April 12, 2019 (start of scheme), December 22, 2020 (end of scheme)
Sentence or Outcome: CCA agreed to pay $520,355.65 to resolve the allegations.
Dollar Amounts: $520,355.65 (resolution amount), $2,500 (payment to each of four physicians and physician practices)
Defendant Name: Commonwealth Care Alliance, Inc.
Crime: False Claims Act Violations
State: Michigan
Year: 2022
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Key Facts
- State: Michigan
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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