Oak Street Health, the primary care clinic chain now owned by CVS Health, has agreed to pay $60 million to settle federal allegations that it ran an illegal kickback scheme designed to funnel Medicare Advantage patients into its clinics. The settlement, reached with the U.S. Department of Justice, resolves allegations that Oak Street paid third-party marketers, insurance agents, and other individuals to refer Medicare beneficiaries to its facilities — a practice that violates the federal Anti-Kickback Statute. For the roughly 67 million Americans enrolled in Medicare, this case is a stark reminder that the financial incentives swirling around Medicare Advantage can sometimes work against the very patients the system is supposed to serve.
The Anti-Kickback Statute is one of the most important federal healthcare laws you've probably never heard of. It makes it illegal for any person or company to offer, pay, solicit, or receive anything of value — cash, gift cards, meals, free services — in exchange for referrals of patients covered by federal healthcare programs like Medicare or Medicaid. The law exists because when money changes hands to steer patients toward a particular provider or plan, the patient's medical needs take a back seat to someone else's financial interests. In the Oak Street case, federal investigators alleged that the company paid brokers and marketers to bring in Medicare Advantage enrollees, essentially treating patients as billable units rather than people who needed primary care.
Oak Street Health operates more than 170 clinics across roughly 20 states, with a business model built almost entirely around Medicare Advantage patients. The company was acquired by CVS Health in 2023 for approximately $10.6 billion. Its clinics are designed to serve older adults with complex chronic conditions, and the model has been praised in some quarters for providing more comprehensive primary care than traditional fee-for-service practices. But the DOJ settlement reveals a darker side of that growth story — one where aggressive patient recruitment allegedly crossed legal lines. Oak Street has not admitted wrongdoing as part of the settlement, which is standard in civil False Claims Act resolutions, but the $60 million payment is one of the larger kickback-related settlements involving a primary care provider in recent years.
For beneficiaries who are current Oak Street Health patients, the most immediate question is: does this affect my care? The short answer is no — at least not directly. The settlement is a civil financial resolution between Oak Street and the federal government. The clinics remain open, physicians remain licensed, and your medical records remain yours. CVS Health has indicated it intends to continue operating Oak Street as a going concern. However, if this news has shaken your confidence in the organization, you have options. Medicare beneficiaries can request their medical records at any time and transfer care to another primary care provider. Switching providers does not require you to change your Medicare Advantage plan, as long as your new provider is in-network.
If you do want to change your Medicare Advantage plan — perhaps because your current plan's network is heavily tied to Oak Street clinics and you'd prefer a plan with different provider options — you'll need to act during a qualifying enrollment window. The Annual Enrollment Period (AEP) runs from October 15 through December 7 each year, and any plan changes made during that window take effect January 1. The Medicare Advantage Open Enrollment Period (OEP) runs from January 1 through March 31 and allows you to switch from one Medicare Advantage plan to another, or drop Medicare Advantage and return to Original Medicare, one time. Outside of these windows, you'd generally need a Special Enrollment Period (SEP) triggered by a qualifying life event — such as moving out of your plan's service area or losing coverage — to make changes.
This case also raises a broader question that every Medicare Advantage enrollee should be asking: how was I enrolled in my current plan, and who benefited from that enrollment? Medicare Advantage has become a massive market. According to CMS.gov data, more than 33 million beneficiaries were enrolled in Medicare Advantage plans in 2024, representing over 51% of all Medicare-eligible individuals. The average Medicare beneficiary in 2024 had access to 43 Medicare Advantage plan options in their county, according to KFF analysis of CMS plan data. With that many plans competing for enrollees, the financial pressure on insurers and clinic networks to recruit aggressively is enormous — and that pressure is precisely what the Anti-Kickback Statute is designed to keep in check.
Data Snapshot: According to CMS.gov data from its Medicare Advantage and Part D Contract and Enrollment data files, Medicare Advantage enrollment grew from approximately 28.4 million in 2022 to more than 33.8 million by early 2024 — an increase of nearly 19% in just two years. That explosive growth has attracted significant investment in primary care clinic networks like Oak Street, but it has also drawn increased scrutiny from the Department of Justice and the HHS Office of Inspector General, both of which have ramped up enforcement actions targeting Medicare Advantage marketing and referral practices.
The Oak Street settlement is part of a broader federal crackdown on Medicare Advantage fraud and abuse. The HHS Office of Inspector General has repeatedly flagged Medicare Advantage as a high-risk area for improper payments, overbilling, and now, illegal referral arrangements. In recent years, the DOJ has also pursued cases against insurance agents who accepted undisclosed payments to steer beneficiaries toward specific plans, and against telemarketing operations that used deceptive tactics to switch seniors into plans without their full understanding. The common thread in all of these cases is that someone in the chain — a marketer, a clinic, an agent — was being paid to influence your healthcare decisions without your knowledge.
So how do you protect yourself? Start by understanding how your current Medicare Advantage plan was sold to you. If you enrolled through an insurance agent or broker, that agent is legally required to be licensed in your state and to disclose any compensation they receive. You can verify an agent's license through your state insurance commissioner's website. If you were approached by a third-party marketer — someone who wasn't a licensed agent but offered you gift cards, free meals, or other incentives to visit a clinic or enroll in a plan — that is a red flag worth reporting. You can file a complaint with the HHS Office of Inspector General at oig.hhs.gov or call 1-800-HHS-TIPS (1-800-447-8477).
It's also worth knowing what Medicare Advantage plans are legally allowed to offer as enrollment incentives. Plans may offer certain supplemental benefits — dental, vision, hearing, fitness memberships — as part of their standard benefit package. What they cannot do is offer cash, gift cards, or other monetary incentives specifically to induce enrollment. If someone offers you a $50 gift card to sign up for a plan or visit a particular clinic, that arrangement may violate federal law, and you should report it rather than accept it. Your enrollment decision should be based on the plan's coverage, network, premiums, and out-of-pocket costs — not on a one-time incentive that disappears after you're locked in.
For beneficiaries evaluating Medicare Advantage plans more broadly, the best tool available is Medicare's Plan Finder at medicare.gov/plan-compare. You can enter your zip code, your medications, and your preferred doctors to compare plans side by side on cost, coverage, and star ratings. CMS assigns star ratings to Medicare Advantage plans on a scale of 1 to 5, with 5 being the highest. Plans rated 4 stars or above are generally considered high-performing. In 2024, approximately 57% of Medicare Advantage enrollees were in plans rated 4 stars or higher, according to CMS data — though star ratings measure administrative performance and member satisfaction, not necessarily the ethical conduct of affiliated provider networks.
The Oak Street settlement should also prompt a conversation about the structure of Medicare Advantage itself. The program pays private insurers a fixed monthly capitation rate for each enrollee, which means insurers and their affiliated clinic networks have a financial incentive to enroll as many patients as possible — particularly healthier patients who cost less to treat. Critics of the model argue that this creates structural pressure toward the kind of aggressive, incentive-driven recruitment that allegedly occurred at Oak Street. Supporters counter that capitation encourages preventive care and care coordination that fee-for-service Medicare does not. Both arguments have merit, and the tension between them is likely to keep federal regulators busy for years to come.
If you're an Oak Street patient who feels your care has been affected, or if you believe you were enrolled in a Medicare Advantage plan through improper means, you have recourse beyond simply switching plans. You can file a complaint with your State Health Insurance Assistance Program (SHIP), which provides free, unbiased Medicare counseling in every state. You can find your local SHIP counselor at shiphelp.org or by calling 1-800-MEDICARE (1-800-633-4227). SHIP counselors can help you review your current coverage, understand your enrollment options, and navigate complaints — all at no cost to you. In a Medicare Advantage market that is growing faster than federal oversight can always keep pace with, having an independent advocate in your corner is one of the smartest moves you can make.