Ohio’s Medicaid director owns the stock of some major contractors, but won’t say how much
Since she became director of the Ohio Department of Medicaid in January 2019, Maureen Corcoran has owned stock in some of the department’s biggest contractors. Given the size of those contracts, they could have increased the value of the stock Corcoran owned.
But while she complied with one set of state disclosure requirements, Corcoran won’t say just how much stock she owns in such companies as CVS Health, UnitedHealth Group and Express Scripts — each of which has done billions of dollars worth of business with the Medicaid department since Corcoran started running it.
In addition, Corcoran won’t say if she filed legally required affidavits disclosing that she had an ownership stake in corporations the department hired earlier this year as part of its $20 billion managed-care re-procurement or the company the state hired to run its $1 billion OhioRISE program. Should they be found, violations of the law could carry criminal penalties and invalidate contracts signed without proper disclosures.
When Corcoran took the reins of the Medicaid department, she held a stake in some companies that were getting a lot of scrutiny over their business with the state. Two were CVS Caremark and OptumRX, pharmacy middlemen that together were handling more than $2 billion a year in prescription-drug transactions for the department.
Ohio’s independent pharmacists and others accused the companies of several questionable practices — including charging a lot more for drugs than they were paying pharmacists. A state-commissioned analysis showed that in 2017, CVS and Optum charged almost a quarter-billion dollars more for drugs than they reimbursed the pharmacies that had bought and dispensed them.
The findings were still big news — and the companies were suing the Medicaid department — when Corcoran took control just after Gov. Mike DeWine took office at the start of 2019. Even so, Corcoran held onto stocks in CVS Caremark owner CVS Health and in OptumRX owner UnitedHealth.
According to disclosures filed with the Ohio Ethics Commission, Corcoran owned at least $1,000 worth of those companies’ stock.
Given that they were among 180 stocks and mutual funds she disclosed owning as of Jan. 31, 2019, it’s possible that Corcoran wasn’t even aware that she held stakes in companies that did such high-profile business with her agency. Whatever the case, Corcoran held onto shares in the companies through 2019 and 2020, her ethics filings show.
Under Ohio’s aging ethics laws, agency bigwigs like Corcoran are allowed to own stock in companies with which their departments do business so long as their holdings don’t exceed 5% of the company’s outstanding stock. In the case of Medicaid’s big contractors, that would mean the director would have to be one of the wealthiest people in Ohio to violate the provision.
CVS and UnitedHealth are the fourth and fifth-largest corporations in the country by revenue. In order to violate the ethics provision, Corcoran would have to have owned a combined $18 billion worth of the companies’ stock in 2019.
Potential for conflict
That’s a clear sign that the state’s ethics laws need to be updated, said Catherine Turcer, executive director of Common Cause Ohio, a watchdog group.
“Five percent of a company’s stock in the 70s, 80s or even the 90s wasn’t anywhere near what it is now,” Turcer said.
In addition, knowing just how much Corcoran’s investments with Medicaid contractors were worth would go a long way toward showing how big a conflict of interest she has. If it’s just over $1,000, the conflict might seem nominal, but if it’s much more, it would be a lot more serious, Turcer said.
“There are two things Maureen Corcoran could do,” Turcer said. “One would be to publicly identify how much over the $1,000 she owns and allow the public to weigh in. The other thing she could do so the public didn’t worry about the conflict of interest is actually divest herself of these stocks.”
Last Friday, the Medicaid department was asked the value of Corcoran’s investments in CVS, UnitedHealth and Express Scripts, a third pharmacy middleman with which the department has done business.
A spokeswoman for the department said it would respond to those and other questions, but as of Tuesday afternoon, it hadn’t. The spokeswoman also didn’t answer questions about when responses would be forthcoming.
Potentially more ominous for Corcoran and her department is another question they haven’t responded to: Whether Corcoran filed affidavits disclosing her interest in companies with whom the department recently entered into huge contracts.
This year, the Medicaid department implemented a big redesign of its managed care program.
To gain more insight into drug transactions, the department will work next year with a single drug middleman contracted directly with the department — instead of being hired by managed-care providers as they have in the past.
But while UnitedHealthcare’s OptumRx might be losing that business, the Medicaid department is hiring UnitedHealthcare Community Plan of Ohio to be one of six companies administering the state’s $20 billion-a-year managed-care program.
The re-procurement has raised other questions. Also hired was a plan owned by managed-care giant Centene, which agreed earlier this year to pay out more than $1 billion to Ohio and 21 other states after being accused by Attorney General Dave Yost of fleecing taxpayers. Corcoran has struggled to explain why her department would keep doing business with the company.
The state also is creating OhioRISE, an ambitious program intended to help 60,000 Ohio children with the most complex behavioral health and other needs. Aetna Better Health of Ohio was selected in April to administer the $1 billion program.
The company is a subsidiary of insurer Aetna. CVS — in which Corcoran has been invested — bought the Aetna for $70 billion in 2019.
It’s unclear whether Corcoran continues to own stock in UnitedHealth or CVS, or whether she disclosed any ownership when contracts were let this year.
But the state law governing such disclosures spells out potential criminal penalties for violations and it says any contract so made “is void and unenforceable.”
This story was republished from the Ohio Capital Journal under a Creative Commons license.