Both the state auditor and Mississippi attorney general are investigating whether Centene Corp., as a provider of Medicaid drug services, failed to disclose discounts on pharmacy services, inflated dispensing fees and received reimbursements for amounts already paid.
Ohio Attorney General Dave Yost made similar allegations in a lawsuit. “Corporate greed has led Centene and its wholly owned subsidiaries to fleece taxpayers out of millions,” he said. “Centene has broken trust with the state of Ohio, and I intend to hold this company accountable for its deceptive practices.”
Asked about these allegations in Mississippi, a Centene spokesman told MCIR, “In our viewpoint, these claims are unfounded, and Envolve (a wholly obtained subsidiary) will aggressively defend the integrity of the pharmacy services it has provided. Envolve Pharmacy Services saved millions of dollars for taxpayers when compared to market-based pharmaceutical pricing. We look forward to answering any questions from our governmental partners regarding this issue. Our company is committed to the highest levels of quality and transparency.”
Between 2016 and 2020, the Mississippi Medicaid program paid Centene more than $1.1 billion for pharmacy services.
State Sen. Becky Currie, R-Brookhaven, said if Centene is “cheating in the pharmacy area, what else are they doing? We don’t know because we’ve never bothered to look.”
Medicaid patients are covered under MississippiCAN, a plan that lets patients pick from three for-profit managed care companies: Molina Healthcare (a new entry), UnitedHealthcare Community Plan and Magnolia Health, a subsidiary of Centene, which in 2020 took in more than $111 billion, nearly double its total revenue from two years earlier.
These companies promise to reduce medical costs by promoting better health care among patients.
So what do the numbers show?
In 2015-2016, Magnolia received overall scores of 1.5 in prevention and 2 in treatment (on a scale of 1 to 5), according to the Health Insurance Plan Ratings issued by the National Committee for Quality Assurance, a nonprofit that uses surveys and data to measure health care quality.
Four years later, prevention inched up to 2, while treatment stayed the same at 2. Scores of 2 and lower are considered “lower performance.”
Magnolia did improve in consumer satisfaction from 3 to 4.5. The scores of 4 and higher are considered “higher performance.”
In areas broken down by categories, the company received a score of 5 for dental visits and avoiding opioids at high dosage and a 4 for eye exams and asthma control. But the score was 1 for childhood and adolescent immunizations as well as heart disease, a 1.5 for children and adolescent well care and a 2 for diabetes treatment.
In 2015-2016, UnitedHealthcare received a 1.5 score each in prevention and treatment. Four years later, those scores improved slightly to 2.5 in prevention and 2 in treatment. During that same time, consumer satisfaction fell slightly from 3.5 to 3.
UnitedHealthcare scored a 5 for dental visits and asthma control, and a 4 for prenatal checkups, for continued follow-up after diagnosis for attention deficit disorder and “getting care quickly.”
The company received a host of 1s that included childhood immunizations, blood pressure control, glucose control, statin therapy for diabetes, statin therapy for cardiovascular disease and getting patients to adhere to depression medication.
There are no scores so far for Molina, according to the website.
Asked about these low scores, UnitedHealthcare spokeswoman Sara Belfry responded, “We are working to ensure our members receive the care we expect, and 85% of our primary care physicians are in value-based contracting agreements that reward those who achieve improved quality of care results. We also provide clinical guidance and collaborate with providers to develop innovative programs to close member/patient gaps in care and help providers improve quality measures.”
Belfry said the quality scores for UnitedHealthcare had actually improved 60% since 2012. That’s when the company’s scores were even lower.
“We continue to make investments in communities across Mississippi to improve public health,” she said.
A spokesperson for Magnolia Health said the company “is committed to ensuring our members have access to high-quality healthcare, and we partner with providers to offer comprehensive healthcare services with a focus on positive outcomes for our members. Magnolia continues to develop new and innovative programs to treat the whole person and focus on each individual’s unique needs.
“Routine well-child care and vaccinations have declined dramatically during the COVID-19 pandemic, as parents avoid medical services to mitigate the transmission of the coronavirus. While Magnolia Health recognizes the health concerns of the community, it encourages parents to continue to schedule checkup appointments and get early vaccinations for young children to protect against preventable diseases.”
Taxpayers should be concerned about how their millions are being spent by these companies, said Richard Roberson, general counsel for the Mississippi Hospital Association, which has competed for a managed care contract. “If public school test scores were that low, legislators would have a fit about high administrative costs for poor classroom performance.”
Matt Westerfield, a spokesman for the state’s Division of Medicaid, said they look at these health insurance plan ratings “the way we look at Hospital Quality Star Ratings – they are instructive but not the complete picture. While we see room for improvement, we are encouraged that (these) ratings have improved over time, and that one plan’s consumer satisfaction score is among the highest in the country.”
He said, since Drew Snyder took over as executive director in 2018, the department has “focused more on quality rather than quantity.”
A year later, the department introduced two initiatives to improve that quality, the first of which could impose financial penalties, Westerfield said. Magnolia avoided a financial penalty, but UnitedHealthcare and Molina did not.
The second initiative, the Quality Incentive Payment Program, uses supplemental funds to improve the quality of care and health of those covered by Medicaid, he said. “Payments are linked to potentially preventable hospital readmission rates.”
The Division of Medicaid, he said, is also working with stakeholders to improve its Managed Care Quality Strategy, which was last updated in 2018.
Currie wonders how much managed care is taking place. She said she has seen Medicaid patients show up repeatedly in the emergency room, but has yet to hear a MississippiCAN company calling one of these patients to schedule follow-up appointments.
Currie, a member of the House Medicaid Committee, called for a full audit of the companies. “We are giving them full rein of Mississippi taxpayers’ money without checks and balances,” she said. “Are legislators finally going to look at this and realize that we can do better?”
New legislation requires more stringent reviews or audits of these companies, but stops short of specifics.
Currie warned that an audit would mean nothing if experts in Medicaid aren’t involved. “It’s a monster to understand,” she said.
In 2016, the Legislature authorized the examination of the performance of the managed care companies. The report concluded that in 54 out of 68 categories, Magnolia and United failed to meet or only partially met requirements.
That report by Navigant Consulting cited widely varying numbers, questioning the validity of some Medicaid data. In May 2016, Magnolia reported that 22% of patients had follow-up visits within 30 days of hospitalization, but in June that figure was 62%. In July 2016, UnitedHealthcare reported 0.8% of patients and a month later reported 1.98%.
The Navigant report concluded by recommending that lawmakers order an in-depth study to evaluate the cost of the MississippiCAN program.
In its 120-page response, Mississippi’s Medicaid officials disputed many of Navigant’s findings, saying they had already provided such an evaluation to the Legislature. A report for the agency by Myers and Stauffer concluded that MississippiCAN had saved the state $286 million between 2011 and 2017.
During that same time, the auditor’s office determined that more than $616,000 in “improper payments” had been made to these managed care companies, and Mississippi’s Medicaid officials agreed.
In 2015, Mississippi Hospital Association offered to provide a nonprofit competitor, Mississippi True, to the for-profit managed care companies. The governor signed a law that enabled such provider-sponsored health plans to operate, but Mississippi True failed to score high enough to make the cut, Medicaid officials said.
Three years later, the House voted for language to allow a limited pilot for Mississippi True, but that part of the bill died in the Senate.
Currie wondered why leaders never gave Mississippi True a chance, saying she believed it was “cheaper and better, and I’m all for cheaper and better.”
The pandemic has devastated many businesses, but the revenue for Magnolia’s parent, Centene, skyrocketed past $111 billion in 2020. In its second quarter report, the company acknowledged it had profited “from lower medical utilization as a result of the COVID-19 pandemic.”
In recent years, Centene has been buying up health-related companies. The St. Louis-based company now ranks among the nation’s 10 biggest healthcare corporations.
Centene is filling campaign coffers
Centene remains a Wall Street darling, ranking 42 on the Fortune 500, and is also one of the governor’s big donors. He has received more than $200,000 from the corporation, plus another $5,000 from Centene’s top brass, including CEO Michael Neidorff, who brags that his company serves 1 in every 15 Americans, “maintaining our leadership in government-sponsored healthcare.”
Reeves is hardly alone. Centene gave $43,000 to 10 Mississippi lawmakers through its political action committee, $20,000 to the Republican Party of Mississippi and $10,000 to the Democratic Party of Mississippi, according to OpenSecrets.org.
Centene Management Co.’s LLC gave then-Lt. Gov. Tate Reeves one large $50,000 donation, making the company the largest donor in 2017. The LLC also gave $25,000 to House Speaker Philip Gunn and $10,000 to Secretary of State Delbert Hosemann.
On the national front, Centene helped finance Donald Trump’s 2016 presidential inauguration and contributed $41,458 to his 2020 race, according to OpenSecrets.org. Centene was even more generous with Democratic candidate Joe Biden, who received $289,401.
Centene has given more than $12 million in contributions to politicians across the U.S. over the past 21 years, according to FollowTheMoney.org. Nearly $7.3 million has gone to Republican candidates, nearly $3.5 million has gone to Democratic candidates, and another $1.5 million has gone to candidates whose parties weren’t designated.
So far, 38 states have expanded Medicaid, many of them creating their own version, including Republican-led Indiana when Mike Pence was governor.
Mississippi should follow their lead, Currie said. “As a nurse of over 40 years, my whole life has been to take care of the sick and poor, and we are doing a terrible job of that.”
Even states that have balked before at Medicaid expansion before are now considering it, including Wyoming, where the state House has passed an expansion bill.
Mississippi health care officials say the money is desperately needed. Since 2014, five of Mississippi’s rural hospitals have closed, and more than half are now at risk of immediate closure.
Arkansas, which did expand Medicaid, has seen only one rural hospital close. That state has seen a 30% reduction in the costs of uncompensated care.
In contrast, 52 rural hospitals closed in surrounding states over the past decade, according to the Arkansas Center for Health Improvement.
“I am very concerned about access to health care in rural parts in Mississippi,” Gov. Tate Reeves told MCIR. “I think it’s critically important that we focus our conversation around not only affordability but accessibility to rural facilities around Mississippi.”
Asked if these rural hospitals would have been better off if Medicaid had expanded, Reeves replied that he didn’t believe Medicaid expansion “was the right thing for Mississippi.”
A 2016 study by the National Center for Health Statistics showed that more than twice as many people living in states that haven’t expanded Medicaid failed to get care they needed because of the costs.
A study released last year by Vanderbilt University School of Medicine and Harvard Medical School showed that Medicaid expansion slowed rates of health decline in Southern states that approved expansion.
“It helped people maintain their health so that they didn’t fall off the cliff,” said co-author Dr. John Graves. “It helped move people out of poor states of health or kept them from declining into poor health.”
In this year’s legislative session, Mississippi lawmakers failed to take up a bill that promised to take the state off the hook for its share of Medicaid. Called MississippiCares, it would pay for the state’s share through a combination of hospital taxes and monthly patient premiums.
“I wanted MississippiCares badly,” Currie said. “Who doesn’t want to hire a Mississippi company with Mississippi employees?”
She would like to see those in power to sit down at a table and examine how to improve health care access. “If you won’t bother to sit down and look at this,” she said, “that’s going to be your legacy.”
Insurance Commissioner Mike Chaney believes there is a better plan besides MississippiCARES.
His office was looking to buy an insurance policy that would cover those added under Medicaid expansion. But when he checked last week into a possible waiver from the U.S. Department of Health and Human Services’ Centers for Medicare and Medicaid Services, he said officials told him they couldn’t do anything without a request from the Legislature.
The Kaiser Family Foundation is predicting that if Mississippi continues to reject Medicaid expansion, it would leave $24 billion on the table, he said. “That’s over almost five times what our annual budget is for the state.”
Expanding Medicaid would add at least $1 billion a year to the state’s coffers. The new $1.9 trillion COVID-19 relief legislation, signed by President Biden, has made expansion even more enticing. For the next two years, the state would only have to pay a 5% share instead of 10%.
Despite that offer, Reeves continues to reject Medicaid expansion. He calls it “Obamacare expansion” and insists that “the people have spoken on the issue” by voting for him.
Hob Bryan, chairman of the Senate Public Health and Welfare Committee, said babbling opposition to “Obamacare” does nothing to keep rural hospitals open or to improve health care access for the needy.
Mississippi is turning its back on billions that “could alleviate human suffering,” said the Democrat from Amory. “Does it matter if people are sick and dying? All we care about is holding down the Medicaid budget.”
Beyond health, Mississippi lawmakers should note that local hospitals are often the largest employers in rural communities, Currie said. “Look at it as economic development.”
Centene drew scrutiny in Ohio
Mississippi and other states began taking a closer look at Centene after The Columbus Dispatch in Ohio reported in 2018 that that state’s taxpayers might be paying twice for the same Medicaid drug services.
HealthPlan Data Solutions determined the pharmacy middlemen in Ohio were raking off up to $186 million a year above the industry’s standard profit margin. Ohio taxpayers were paying three to six times as much to process prescription drugs for the poor and disabled as the industry standard, according to its report.
Ohio wasn’t the only state with issues.
In 2019, Arkansas told Centene officials they had to refund more than $12 million after collecting too much in premiums. According to the Centers for Medicare and Medicaid Services, Centene collected $983 million in premiums for its plans covering Arkansas Works enrollees and other consumers in the state from 2016-18, but spent just $756 million of that on medical care and other health-related expenses.
In Mississippi, the state auditor’s office began digging into the pharmacy allegations against Centene in the summer of 2019, according to a letter obtained by MCIR. Asked about this, the auditor’s office confirmed it was indeed investigating the matter on behalf of taxpayers.
Mississippi Attorney General Lynn Fitch’s office is also investigating the matter. “We are still early in our investigation,” said Colby Jordan, director of communications, “so we cannot release details yet, but it is similar to the Ohio case.”
The Ridgeland law firm of Liston & Deas, which is working with the Ohio attorney general’s office, is representing Mississippi in the matter and declined to comment.
“It’s never been about what’s good for Mississippi,” Currie said. “Our hospitals are struggling. If nothing changes, our healthcare system is going to break.”
This report was produced in partnership with the Community Foundation for Mississippi’s local news collaborative, which is independently funded in part by Microsoft Corp. The collaborative includes the Clarion Ledger, the Jackson Advocate, Jackson State University, Mississippi Center for Investigative Reporting, Mississippi Public Broadcasting and Mississippi Today.
Researcher Vilas Annavarapu contributed to this report.