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DeWine: Additional transparency not needed in massive Medicaid contracts

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Ohio Governor Mike DeWine (Photo courtesy Governor's Office)

Ohio Medicaid Director Maureen Corcoran apparently held stock in two huge health companies last year as she negotiated and signed multi-billion-dollar contracts with their subsidiaries. But she has refused to say how much she owned as she signed the deals.

Nor will the man who appointed her, Gov. Mike DeWine, say he thinks Corcoran should disclose the details of her private business with companies benefitting from her public contracts. After the governor last week declined to directly answer a question about the matter, his spokesman this week said the governor believes the Medicaid director has complied with the law.

When it comes to transparency in this case, the administration is disinclined “go above and beyond” that.

Public corruption has been a major issue through the first years of the DeWine administration.

In July 2020, former House Speaker Larry Householder, R-Glenford, and four aides were arrested by federal authorities on charges that they corruptly used $61 million from Akron-based FirstEnergy to make Householder speaker and pass a $1.3 billion energy bailout. Two of the aides have since pleaded guilty and a third died by suicide.

As a lobbyist for FirstEnergy, one of DeWine’s top aides set up a 501(c)(4) “dark money” group that federal prosecutors say was a major conduit in funding the scheme. And DeWine’s appointee to head up the Public Utilities Commission was forced to resign amid revelations that FirstEnergy paid him $4.3 million just weeks before he took his post as the state’s top utility regulator.

Questions about governmental integrity haven’t been limited to the utility sector.

In August, the Medicaid department said it was resuming contract negotiations with Centene, the nation’s largest Medicaid managed-care provider. Just two months earlier, Attorney General Dave Yost announced that Centene had agreed to pay Ohio $88 million to settle claims Yost made in a March lawsuit that Centene’s subsidiaries had bilked Ohio taxpayers out of tens of millions of dollars.

The Ohio suit prompted Centene to set aside more than $1 billion to settle potential claims in 21 other states. Meanwhile, Corcoran, the Medicaid director, struggled to explain why the state would award such a huge contract to a company so recently accused of ripping off her department.

The contract Centene won was part of a historically large, $22 billion procurement meant to reform the way Medicaid does managed care — and Centene wasn’t the only winning company to have legal difficulties with the state. A subsidiary of UnitedHealth Group also won a managed-care contract even though its pharmacy benefit manager is being sued by Yost on claims that it ripped off $16 million from the Bureau of Workers Compensation.

When Corcoran signed a contract with UnitedHealth’s managed-care subsidiary, she apparently had investments in the parent company’s stock. She also seems to have been invested in CVS, whose subsidiary won a related, billion-dollar contract to provide services to 60,000 Ohio kids with complex behavioral needs.

One can only say Corcoran “seems” to have owned stock in the parent companies when she signed huge contracts with their subsidiaries. That’s because she’s filed disclosures with the Ohio Ethics Commission saying that between early 2019 and the end of 2020, she owed at least $1,000 worth of stock in each company.

Corcoran declined to file an affidavit under a separate ethics law that would disclose her exact holdings as she negotiated and signed the contracts. Such a filing would have exempted her from a finding that she had an illegal conflict of interest. No such finding has been made.

In a court dispute over the contract, lawyers for the Department of Medicaid contended that because Corcoran held stock in the mammoth parent corporations while contracting with companies that were down a chain of subsidiaries, she didn’t have a conflict.

For her part, Corcoran filed documents with the court saying she was unaware of her holdings in UnitedHealth and CVS when she signed contracts with their subsidiaries in early April. But then in May she filed disclosures with the Ethics Commission swearing that she knew she held at least $1,000 worth of stock in each company through the end of 2020 — well after the deadline for applications in the procurement.

Given all these questions, it might make sense for Corcoran to make a clean breast of things and publicly disclose her exact holdings.

Medicaid spokeswoman Lisa Lawless was asked again about the matter last week. In an email, she said she would respond, but so far hasn’t.

In an interview last week, DeWine was asked if he thought Corcoran should disclose her stock holdings in corporations to whose subsidiaries she’d awarded such big, taxpayer-funded deals.

“I’ve not really looked at that,” DeWine said. “I’ll take a look at that and give you an answer.”

Asked if he was aware that questions about Corcoran’s holdings had been raised, DeWine said he was.

“Before I answer, let me find out what our team has done,” he said. “I don’t want to mislead you in any way and not be consistent with what they have done, so let me check that out and we’ll get back to you.”

Earlier this week, DeWine Press Secretary Dan Tierney said that lawyers working for the Medicaid department had determined that Corcoran had complied with Ohio law.

“The bottom line is No. 1, this did come up in the context of litigation, so this was looked at by outside attorneys that were part of that litigation and they put in the court record the highlights of their findings, which were that the stock holdings did not present an issue under Ohio law,” Tierney said.

But wouldn’t it be more transparent just to order Corcoran to tell the public how much stock she owned in corporations that had a huge interest in her department’s massive procurement?

“You’re asking if we should go above and beyond in these situations,” Tierney said. “Each case is a case-by-case basis, but we have confidence that the decisions that were made were done ethically and they were done for the right reasons.”


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

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