Troy Health, Inc. (Troy), a North Carolina-based provider of Medicare Advantage, Medicare Part D, and Dual Eligible Special Needs Plans, has entered into a non-prosecution agreement with the Department of Justice to resolve a criminal investigation into a health care fraud and identity theft scheme involving the use of artificial intelligence and automation software to illegally obtain Medicare beneficiary information and fraudulently enroll beneficiaries into its Medicare Advantage plans.
“Troy told low-income Medicare beneficiaries that it would use new technologies, including its proprietary artificial intelligence platform, to improve patient health outcomes,” said Acting Assistant Attorney General Matthew Galeotti of the Justice Department’s Criminal Division. “Instead, the company misused patient data to enroll beneficiaries in its Medicare Advantage plan without their consent. Today’s resolution reflects the Criminal Division’s emerging focus on corporate enforcement in the health care space and holding both individuals and companies accountable when they defraud our medical system to enrich themselves at the expense of the American taxpayer.”
“Health care providers that fraudulently enroll individuals in Medicare Advantage plans just to boost company profits undermine the integrity of the Medicare program and the well-being of Medicare enrollees,” said Special Agent in Charge Kelly J. Blackmon with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Alongside our law enforcement partners, HHS OIG will continue to protect the American public and ensure that the personal health information of Medicare beneficiaries remains secured.”
As part of the non-prosecution agreement, Troy admitted that, from approximately October 2020 through the end of 2022, Troy defrauded the Medicare program by enrolling beneficiaries in Troy’s Medicare Advantage plans without their knowledge or consent. Under a Troy executive’s direction, some of Troy’s Territory Managers used proprietary software developed by one of Troy’s executives to unlawfully access pharmacy records and customer lists containing sensitive personal information, including beneficiaries’ names, addresses, dates of birth, Medicare ID numbers, and insurance information. Troy used that information to make unsolicited sales calls to potential beneficiaries. During those sales calls, Troy’s sales personnel provided false and misleading information to Medicare beneficiaries. For example, Troy’s sales personnel told prospective enrollees that they were calling on behalf of the beneficiaries’ pharmacies and representing to beneficiaries that Troy’s Medicare Advantage plan was being offered as a supplement to their existing health care plans rather than as a new plan.
Troy also used an artificial intelligence-based health care management platform it developed and made available to participating pharmacies, known as Troy.ai, as part of the scheme. As described by the company, Troy marketed Troy.ai as a product that would leverage data and machine learning to lower the cost of care and improve health outcomes. As part of its effort to obtain new enrollments, however, Troy misused the platform by offering pharmacies kickbacks for enrollment referrals submitted through Troy.ai.
Troy also admitted that it used information obtained from the customer lists to enroll beneficiaries in Troy’s Medicare Advantage plan without their consent. At the height of the scheme, during the Medicare Advantage open enrollment period between Jan. 1, 2022 and March 31, 2022, Troy enrolled over 2,700 new Medicare Advantage members, many through automatic or batch enrollments. For example, on March 2, 2022, Troy enrolled over 300 beneficiaries on one day, with the enrollments occurring approximately one minute apart. In addition, some Troy employees manually entered fraudulent enrollments through the Centers for Medicare and Medicaid Services (CMS) website. This conduct followed a Troy executive’s announcement at a 2021 board meeting of an “aggressive but achievable” plan to triple Troy’s enrollment during the 2022 open enrollment period.
As part of the non-prosecution agreement, Troy admitted to and accepted responsibility for the acts of its officers, directors, employees, and agents in connection with the scheme. Troy has also agreed to continue cooperating with the Department in any ongoing or future criminal investigation relating to this conduct. As part of this agreement, Troy agreed to pay a criminal penalty of $1,430,008. This penalty has been adjusted based on Troy’s ability to pay.
The Department reached this resolution with Troy based on several factors, including Troy’s efforts to provide all relevant facts known to it, acceptance of responsibility for criminal conduct, extensive and timely remedial measures taken, commitment to continuing enhancement of compliance and internal control programs, absence of prior criminal history or regulatory actions, commitment to cooperation with federal agencies in any ongoing investigations, and the nature and seriousness of the offense. Troy did not receive voluntary self-disclosure credit, but did receive credit for its cooperation with the Department’s investigation and affirmative acceptance of responsibility, which included (i) self-reporting its 2022 batch member enrollment issue to CMS before it had come to the attention of the Department; (ii) providing timely updates on facts learned during its internal investigation; (iii) providing all relevant facts known to it, including information about individuals involved in the conduct. However, and particularly during the early phase of the Department’s investigation, Troy failed to preserve and produce certain documents and evidence in a timely manner and, at times, took actions that were inconsistent with full cooperation.
The FBI and HHS-OIG are investigating the case.
Trial Attorney Clayton P. Solomon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Armstrong for the Western District of North Carolina are prosecuting the case.
The Criminal Division’s Fraud Section is responsible for investigating and prosecuting health care fraud (HCF) matters. Additional information about the Justice Department’s HCF enforcement efforts can be found at https://www.justice.gov/criminal/criminal-fraud/health-care-fraud-unit.