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Ohio Medicaid officials are given hard questions about awarding a contract to Centene, who recently paid an $88M fine related to the PBM spread-pricing scandal.
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Massive contract restarted after settlement
The Centene Corporation headquarters. Photo from Google Maps.
Ohio Medicaid Director Maureen Corcoran didn’t give many straight answers Wednesday when she was pressed about why her agency restarted a massive contract with a company that earlier this year was accused of “fleecing” taxpayers out of tens of millions of dollars.
At one point, Corcoran even invoked lawyer-client privilege to avoid answering a question.
Appearing on WOSU’s “All Sides With Ann Fisher,” Corcoran was asked by Fisher why her agency would again trust Centene, the largest Medicaid managed-care contractor in the United States. The department earlier this month restarted negotiations for a 2022 contract with the company.
That was just six months months after Ohio Attorney Dave Yost announced that Centene had agreed to pay $88.3 million to settle claims that the company had improperly inflated pharmacy claims by massive amounts. Centene also announced that it was setting aside more than $1 billion to settle similar claims in 21 other states.
The company has emphasized that it didn’t admit to any wrongdoing in the settlement. But in March, Yost was unequivocal when he filed the suit.
“Corporate greed has led Centene and its wholly owned subsidiaries to fleece taxpayers out of millions,” he said.
The Medicaid department announced that it was restarting negotiations with Centene by posting a press release to its website saying the agency was giving Ohio Medicaid clients “more options.” It only alluded to the lawsuit by saying negotiations had been paused because of it and now that the suit had been settled, a contract would be awarded.
Asked at the time why the agency should now trust Centene with taxpayers’ billions, a Medicaid spokeswoman didn’t answer, other than to refer to the press release.
Fisher on Monday sought to press the question with Corcoran, asking why the agency would trust a company the state AG had just accused of fleecing taxpayers. Corcoran’s response was meandering.
“The action that was brought by the attorney general was really separate from the procurement process that we were engaged in which was of course very rigorous,” she said. “It is very common, normal practice in Medicaid that when there are any kinds of legal actions against any kind of managed care provider or a hospital or whomever, we have them identify that, we look into that.
“So we are aware of and looking into legal actions whether here in Ohio or elsewhere is part of the normal Medicaid application process. So of course when we heard the attorney general was going to bring this action, we in similar fashion as I just mentioned took a step back and said we are going to make our own assessment. The attorney general then settled the case.
“There were still several weeks as you know that passed and we were making our own assessment at the same time and determined that we were going to proceed with them as part of our newly selected group of plans. They also, you may remember, scored the second-highest score (in a competitive procurement) from a quality point of view, so they provide good care, they’ve been a partner in Ohio.”
Ohio Medicaid Director Maureen Corcoran. Official photo.
Corcoran then pointed out that Centene’s alleged ripoff had to do with pharmacy benefits. She seemed to imply that since Centene wouldn’t have responsibility for the service under the new setup, there’s nothing to worry about.
“But I also think one thing that’s important to mention is that the issue that the attorney general brought has to do with pharmacy benefit managers and the role that they play with medications,” Corcoran said. “Two years ago, our General Assembly passed a law taking that responsibility away from the managed care plans and instructing the Department of Medicaid to set up a separate pharmacy benefit manager.
“So, in essence, it was important for us to have good business partners, but in essence the underlying problem… and corporate oversight has changed and that set of responsibilities as part of our new design will not be with the individual plans, but will be managed directly by the state.”
How, Fisher asked, had Centene’s corporate oversight changed. Corcoran didn’t really answer, saying instead “we interact with them as a business partner” and that her team was making sure there will “be appropriate ethical training and that there be oversight and compliance monitoring.”
Then Corcoran was asked, since the Ohio attorney general acts as the Medicaid department’s lawyer, whether she had sought legal advice from Yost before deciding to continue the state’s business with Centene.
“As you know, attorneys and clients have a certain legal protection that, if I were aware of any of that, I wouldn’t be able to share it with you anyway,” Corcoran said in a reference to attorney-client privilege. That’s a doctrine that prevents an attorney from discussing privileged matters, but places no such restriction on the client.
Fisher again tried to get Corcoran to explain why she trusted Centene to be a good steward of Ohio’s money — this time in the toughest terms.
“Why would you continue to do business with a company that, as Attorney General Yost said, fleeced taxpayers out of millions?” Fisher asked. “It sounds like you’re doing business with a con man.”
Corcoran didn’t answer the question, instead launching into a 270-word talk about how rapidly the Medicaid program had grown and how the General Assembly has taken steps to reform how the agency handles drug transactions.
Corcoran did, however, answer one question directly.
It came to light this week that Michael Kiggin — a longtime friend of Gov. Mike DeWine — registered to lobby on Centene’s behalf just before Yost sued the company. Among the agencies Kiggin said he’d lobby were the governor’s office and the Medicaid department.
Asked if she knew Kiggin and whether Kiggin had communicated with her about the Centene contract, Corcoran said, “I don’t know Michael Kiggin. I’ve not talked with him, so I can’t really comment on that.”
Asked if Kiggin had communicated with Medicaid staff — including those involved in the Centene contract, Corcoran said, “Absolutely not.”