Medicaid provider’s profits surge just after it announces massive settlement 

Centene is paying out more than $1 billion on fraud claims

By: - August 9, 2021 12:50 am

Centene Michael Neidorff, Chairman and CEO. Despite recent scandals involving the company, Neidorff says profits are the top priority. (DoD Photo by U.S. Army Sgt. James K. McCann, Wikimedia commons).

The business of administering the government health program for the poor continues to be very, very good for Centene — even after it announced it would pay states more than $1 billion to settle claims that the St. Louis-based company had defrauded them.

In addition, its leader says he confident that his company will resume its multi-billion-dollar business with Ohio, the state that first accused it of fraud.

Centene is the largest Medicaid managed-care company in the United States. 

It contracts with providers such as state Medicaid agencies. It signs up clients on their behalf and then coordinates care from doctors, dentists, hospitals — and from middlemen who handle prescription drugs.

Ohio Attorney General Dave Yost initiated an investigation after reporting in 2018 that Centene might have used two of its own middlemen to overbill Ohio by $20 million for generic drugs a year earlier.

Yost sued the company in March, many other states started their own investigations and in June, Centene announced it would settle with Ohio for $88.3 million and with Mississippi for $55 million. It also announced it would set aside about $1 billion to settle with other states. 

When Ohio sued Centene, the Ohio Department of Medicaid said it would pause its business with the company as it implemented a massive revamp of its managed-care system starting next year.

Centene, the nation’s 24th-largest corporation by revenue, derives the vast majority of its revenue from government sources, so you might expect it to be anxious to apologize and show that it’s taking steps to prevent future impropriety.

Instead, Centene stressed in the settlement that it didn’t admit any wrongdoing. In a June investor day, Michael Neidorff, the company’s $25 million-a-year CEO, simply said the issue was behind the company and now it would focus on its No 1. and No. 2 goals: increasing profits.

In a quarterly earnings call late last month, Neidorff sounded as if his company was on track.

“We generated revenue of $31 billion (in the second quarter), an increase of 12% compared to the year ago quarter,” he said. 

Neidorff added that expected that Ohio would let bygones be bygones. He was asked if he expected the state’s Medicaid department to reinstate Centene’s gargantuan contract.

“Yeah,” Neidorff replied. “We continue to be very optimistic and expect a resolution in the very near future. They wanted some additional data, which we’ve had and our consultants provide them. And they’re analyzing that. And as we said with the settlement and the no harm and all court cases we moved everything, there is no reason for them not to reinstitute our bid. We did come in Number 2. And so I am very optimistic on it.”



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Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.