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Six months after claiming massive fraud, Ohio awards contract worth billions to health giant

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Centene Michael Neidorff, Chairman and CEO. Despite recent scandals involving the company, Neidorff says profits are the top priority. (DoD Photo by U.S. Army Sgt. James K. McCann, Wikimedia commons).

Ohio is again in business with a company that only recently it was accusing of massive fraud. The state’s leaders seem reluctant to explain why.

Two months ago, Ohio Attorney General Dave Yost announced that Centene, the largest Medicaid managed-care provider in the United States, would pay Ohio $88.3 million to settle a lawsuit claiming that Centene had defrauded taxpayers of tens of millions of dollars.

In a regulatory filing, the company said its overall settlement of those and expected fraud claims was much bigger than that. It set aside $1.3 billion to settle such claims across the country, the filing said.

But despite the size and breadth of the settlement, Centene CEO Michael Neidorff never apologized for his company’s handling of huge sums meant to help the poor. Instead, the $25-million-a-year executive emphasized that his company hadn’t admitted to any wrongdoing and told investors that both his No. 1 and No. 2 priorities were to make even bigger profits off of such programs in the future.

One might think that in Ohio, where a separate scandal already is raging, state leaders would be reluctant to restart a contract with a Centene subsidiary worth billions of dollars each year. But the Ohio Department of Medicaid has done just that, announcing that Centene’s Buckeye Health Plan would be one of seven companies managing care for the poorest one-fourth of Ohioans next year.

One thing all the players seem to be reluctant to do is discuss why Centene can be trusted with more Ohio taxpayer money.

An analysis commissioned by the Ohio Department of Medicaid showed that in 2017, drug middlemen owned by Centene was charging the state for $20 million for services  that it was already paying CVS for.  It’s a claim they both denied.

The suit AG Yost filed against Centene in March made a similar allegation. It said that Buckeye had defrauded taxpayers of tens of millions of dollars by working through a chain of middlemen to overcharge for prescription drugs.

On Friday — a day when government entities are known to put out news they want to bury — the Medicaid issued a brief press release. It touted the news that Centene’s Buckeye would become the state’s seventh managed care provider by saying it “will give customers more options.”

It didn’t make any mention of fraud; it just said the lawsuit was settled, so it’s time to get back into business with Centene.

“Ohio Medicaid originally deferred its decision on Buckeye’s application after the Ohio attorney general filed a lawsuit against Buckeye Health Plan and other entities related to Buckeye’s pharmacy benefit management structure,” the statement said. “That lawsuit has ended in a settlement. (The Ohio Department of Medicaid) notified Buckeye Health Plan of its decision to award a contract to the (managed-care organization) upon completion of (the Ohio Department of Medicaid’s) review.”

Medicaid spokeswoman Lisa Lawless was asked why, given the fraud allegations, her agency now trusts Centene to handle billions of Ohio taxpayer dollars.

“Following is our announcement regarding the Buckeye decision,” she said in an email containing the department’s short press release from Friday.

Centene also was asked why it should be trusted. didn’t immediately respond to an email asking that question on Monday.

For his part, Yost had strong words for Centene when he sued the company in March.

“Corporate greed has led Centene and its wholly owned subsidiaries to fleece taxpayers out of millions,” he said. “This conspiracy to obtain Medicaid payments through deceptive means stops now.”

Asked Monday whether Yost believed that Centene could be trusted with taxpayer money, his office said that’s a matter for the Medicaid department to deal with.

“Our office is holding Centene accountable for overcharging Ohioans,” Deputy Press Secretary Luke Sullivan said in an email. “Medicaid’s contract is a contract between Medicaid and providers.”


This story was republished from the Ohio Capital Journal under a Creative Commons license.


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