Centene Corp. is currently dealing with legal issues in Mississippi. State officials are checking on allegations that the insurer has overcharged the Medicaid program to boost its profits. Surprisingly though, Centene could get a reward in the form of contract extension of its Medicaid dealings with the state.
Centene’s Medicaid business in Mississippi plays out through Magnolia Health, a subsidiary of the giant insurer. Magnolias’ contract is set to expire, but the state’s Medicaid agency already hinted that the insurance provider would likely get a one-year extension. And there is no need for the company to submit a fresh bid.
While it’s true that Magnolia’s existing deal includes a provision for renewal until 2022, critics said giving the firm another year is unacceptable. For one, investigators are deep into finding potential wrongdoings that Centene’s subsidiary might have just committed. Common sense dictates Magnolia should have been automatically ruled out for doing further business with the state government.
Increasing Profits Via Cost Inflation
According to media reports, state auditors have so far identified a $600,000 worth of improper Medicaid payment attributed to Magnolia. Officials are trying to trace the reported $1.1 billion that the insurer paid to its pharmacy benefit managers (PBM) between 2016 and 2020 to determine if the transactions were legitimate.
Mississippi Today reported that Magnolia’s case has similarities with Centene’s legal troubles in Ohio, in which the insurer settled the case for more than $88 million. State legislator Becky Currie said the state government should at least complete the investigation first on Magnolia even before considering a contract extension for the firm.
“We as taxpayers deserve better than we’re getting … I just believe that putting it off a year is just going to give Centene time to sweep things under the rug,” Currie said.
She added that what happened in Ohio could very well mirror the case in Mississippi. Centene was accused of corporate greed before, so it makes no sense to continue trusting the scandal-prone company, Currie explained.
“So why would we extend their contract? Do we want to have a company with such corporate greed taking care of the most vulnerable people in our state? The sickest, fragile people in our state. I mean, it’s a no-brainer for me. We don’t want that,” continued the state representative.
Unfounded Claims
Magnolia Health issued a statement saying the state probe was prompted by unfounded claims. The insurer said Mississippi had realized savings by doing business with Magnolia over the last four years. As proof of this claim, Magnolia is returning $75 million to the state coffers. The money came from the underutilization of the program due to the COVID-19 pandemic.
“Recent criticisms and inaccuracies have been largely driven by parties with a longstanding agenda against Medicaid Managed Care,” added the company’s press release.
Extension Offer Perplexing
But the contract extension that the state’s Medicaid agency is set to award to Magnolia seemed mysterious given the controversy that the insurance provider is embroiled in. Per the same report, the agency can indeed initiate the process, but its finalization will require the state government’s approval.
And the possibility is quite high that Gov. Tate Reeves would sign on the plan to continue with Magnolia as one of the favored insurance providers in the Mississippi. That’s because public records showed that Centene, a significant donor of Reeves’ recent campaigns, is known for its generous contribution to state and national politicians.
Reeves received a total of $200,000 from the giant insurer, and reportedly, Centene’s biggest single donation to the governor amounted to $50,000. His office, however, has yet to comment on the suggestion that he is supportive of retaining Magnolia’s services.
Centene is in the process of addressing its numerous legal troubles in states across America. Centene CEO Michael Neidorff recently confirmed that the planned settlements with state governments would cost the company over $1.1 billion.
