Centene Corp. is facing allegations of milking the Medicare health insurance system by manipulating its risk adjustment claims. The U.S. Justice Department has launched an investigation on the case, which likely would implicate other insurance firms.
According to the findings shared by the Center for Public Integrity, Centene helped other insurers to inflate their Medicare claims to make more money. The collusion happened through Centene’s consultation division, and the probe supposedly unearthed evidence that showed risk adjustment claims were inflated.
Centene Confirms Government Probe
The giant insurer admitted it is the subject of a DOJ inquiry. Centene said the civil probe was about the Medicare health plans sold by its California subsidiary Health Net.
The Fortune 500 firm, which has an estimated value of $60 billion, also revealed that the investigation was prompted by the whistleblower case involving the United Health Group.
Per the statement issued by Centene on the matter, the insurer said it is ready to cooperate with the government investigation. The company, however, has denied any wrongdoing and made clear that it is prepared to “vigorously defend any lawsuits.”
Entangled With Controversy
Centene has found itself swamped with legal woes following its takeover of Health Net in June 2016. A month after the $6 billion mergers, the company confirmed that Health Net was saddled with financial liabilities running to $390 million.
The admission made by Centene CEO Michael Neidorff led to the company’s market share diving significantly almost immediately. Centene saw a stunning value wipeout of over $1 billion as a direct result of the expensive merger.
Likewise, Centene got entangled with Health Net’s problematic benefit claims in California, which saw the company in legal tussles with hundreds of treatment centers in the state. Sovereign Health, for instance, sued the giant insurer for $1.2 billion, claiming Centene committed fraud in unjustly denying the claims of thousands of Health Net policyholders.
