Corporate Greed Case Study: Oak Street Health and Its Impact on Medicare Patients

A Betrayal of Trust for Profit

For thousands of elderly Americans relying on Medicare, an insurance agent is often a trusted guide through a complex and confusing healthcare landscape. They are expected to provide unbiased advice to help seniors find the best care possible. But between 2020 and 2022, that trust was allegedly weaponized for corporate profit by Oak Street Health, a nationwide chain of for-profit primary care centers.

According to a federal government settlement agreement, Oak Street Health created a system to pay these trusted agents kickbacks. In exchange for cash, agents were incentivized to refer their Medicare patients to Oak Street’s clinics.

The patient, believing they were receiving a recommendation based on their unique health needs, was instead allegedly being sold to the highest bidder. This scheme corrupted the core of the advisory relationship, transforming a trusted guide into a paid salesperson and turning vulnerable patients into commodities.

The Corporate Playbook: How the Harm Was Done

The scheme was formalized under a deceptively bland name: the “Client Awareness Program”. Its stated goal was simple and profit-driven: to “increase its patient membership”. The method, as laid out by the government, was a direct violation of the Anti-Kickback Statute.

Oak Street Health paid insurance agents and broker organizations to contact Medicare beneficiaries and deliver marketing messages designed to steer them toward the company’s services. Once a senior’s interest was piqued, the agent would connect them to an Oak Street Health employee through a “warm transfer” three-way phone call or an electronic form. For each successful referral of an eligible Medicare patient, Oak Street typically paid the agent $200. The operation was exclusively focused on this demographic; company contracts with agents explicitly barred payment if the referred person was not eligible for Medicare.

Truly evil!

This wasn’t a small-scale operation neither. Between September 2020 and January 2022, Oak Street Health made over 20,000 of these payments to agents, funneling more than $4 million in kickbacks to generate new business.

A Cascade of Consequences: The Real-World Impact

Public Health & Safety

The most significant harm of this scheme is the erosion of integrity in healthcare decision-making. The government contends that by paying for referrals, Oak Street Health “incentivized agents to base such referrals and recommendations on the financial motivations of Oak Street Health”. This means a patient’s health journey could be dictated not by a doctor’s recommendation or their own needs, but by a hidden $200 payment.

This practice injects a corrupting financial motive into the heart of healthcare, creating a system where the sick and elderly are seen as targets for profit-driven marketing rather than people in need of care. Public trust in healthcare providers and insurance advisors—a critical component of a functioning health system—is severely damaged when patients learn their choices may have been manipulated for cash.

Economic Ruin

The economic impact of this alleged scheme was a massive fraud against the American taxpayer. The thousands of patients referred through this program received care reimbursed by government health programs, primarily Medicare and, to a lesser extent, Illinois Medicaid. The government asserts that every claim submitted for these patients was tainted by the illegal kickbacks, making them false claims.

The $60 million settlement is a stark measure of the financial damage. Half of that amount, $30 million, is classified as restitution, a direct repayment of the money fraudulently obtained from taxpayer-funded programs. This is money that was diverted from legitimate healthcare needs to fund a business model allegedly built on illegal payments.

A System Designed for This: Profit, Deregulation, and Power

Analysis

The Oak Street Health case is a textbook example of the predictable consequences of a healthcare system dominated by for-profit corporations. In a neoliberal framework that treats healthcare as a market rather than a public good, patients are redefined as “customers” or, in Oak Street’s terms, “patient membership”. The primary goal shifts from patient outcomes to market share and revenue growth.

Within this system, paying kickbacks for referrals is a logical, if illegal, marketing strategy. It is a customer acquisition cost. The “Client Awareness Program” was not a bug in the system, but a feature of a corporate culture relentlessly focused on expansion. This incident reveals the inherent conflict of interest at the heart of for-profit medicine: the duty to care for patients is perpetually at odds with the mandate to generate profit for shareholders. When these priorities clash, as they allegedly did here, it is often the patient’s best interest and the taxpayer’s wallet that lose.

Dodging Accountability: How the Powerful Evade Justice

While Oak Street Health will pay a hefty $60 million fine, the settlement agreement provides a masterclass in corporate accountability avoidance. The document explicitly states that the agreement “is neither an admission of liability by Oak Street Health nor a concession by the United States or the State of Illinois that their claims are not well founded”. In fact, the company continues to “den[y] the allegations”.

This is the classic “cost of doing business” settlement. The corporation pays a financial penalty but is never forced to admit it did anything wrong. This allows the company to manage the public relations fallout while sidestepping the brand damage of a guilty verdict.

Furthermore, while the agreement releases the corporation from further civil claims, it specifically notes that “any liability of individuals” is not released. However, such settlements rarely lead to charges against the executives who designed and approved the illegal schemes. The corporation, an abstract entity, pays the fine, while the decision-makers often remain untouched, free to move on to their next venture. The system punishes the corporate bank account but not the individuals responsible.

Reclaiming Power: Pathways to Real Change

Analysis

This entire scheme was brought to light not by a government audit, but by a whistleblower, Joseph Stinson, who filed the initial lawsuit. This highlights the critical importance of empowering and protecting insiders who have the courage to expose corporate wrongdoing. Strengthening whistleblower protection laws and ensuring they receive a substantial share of any recovered funds, as Stinson will in this case, is one of the most effective checks on corporate power.

However, true reform requires a systemic shift. We must challenge the for-profit model of healthcare itself, which creates the perverse incentives that led to this behavior. Stricter regulations, more aggressive enforcement of anti-kickback laws, and penalties that are truly punitive—including barring companies and executives from participating in federal health programs—are necessary to deter future schemes. The goal must be to create a system where patient well-being is the only bottom line.

Conclusion: A Story of a System, Not an Exception

The Oak Street Health settlement is not a story about a few bad apples. It is a story about the predictable rot produced by an orchard planted in the soil of late-stage capitalism. When healthcare is a commodity, the elderly become a target demographic, and trusted advisors become a sales channel to be exploited. The system is designed to produce these outcomes.

The $60 million payment may seem like a victory for taxpayers, but without a full admission of guilt and accountability for the individuals involved, it is merely a transaction. It is the price of getting caught, calculated and paid so the larger, fundamentally flawed system of for-profit healthcare can continue its relentless pursuit of profit, often at the expense of the most vulnerable among us. This story is a single chapter in the ongoing crisis of a healthcare system that has lost its way.

All factual claims in this article regarding the case of Oak Street Health were derived from the attached Settlement Agreement, No. 20-cv-7381, in the United States District Court for the Northern District of Illinois.

additional links to find the sources used to write this article:

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

https://www.justice.gov/archives/opa/media/1369171/dl