On Nov. 2, 2021, Nevada Gov. Steve Sisolak’s reelection marketing campaign obtained 10 separate $10,000 contributions from what gave the impression to be unrelated medical insurance plans from throughout the nation.
The Buckeye Neighborhood Well being Plan of Ohio, Louisiana Healthcare Connections, and Peach State Well being Plan of Georgia had been among the many corporations that despatched cash to the Democrat, based on state marketing campaign finance data, though just one, SilverSummit Healthplan, supplied insurance coverage within the Silver State.
However a thread connects the businesses: Every is a subsidiary of Centene Corp., ranked twenty sixth on the Fortune 500 checklist, and the nation’s largest personal managed-care supplier for Medicaid, the federal government insurance coverage program for folks with low incomes or disabilities.
Centene had already sealed Medicaid offers in Nevada by means of its SilverSummit subsidiary — but a possible new line of enterprise was on the horizon. Sisolak, who’s up for reelection Nov. 8, had simply authorised a brand new public well being plan possibility that will later speak in confidence to bidding from contractors resembling SilverSummit.
After which, lower than two months after Centene’s subsidiary contributions had been made, Nevada settled with the corporate over allegations the insurer overbilled the state’s Medicaid pharmacy program. The state lawyer normal’s workplace didn’t publicly announce the $11.3 million settlement however disclosed it in response to a public data request from KHN.
Sisolak — who has accepted at the very least $197,000 from Centene, its subsidiaries, high executives, and their spouses since August 2018 — issued a press release by means of his marketing campaign spokesperson Molly Forgey that stated Medicaid contracts are awarded by an impartial group. “There’s zero correlation between Centene’s donations and the way the governor legislates,” Forgey stated. “The governor on no account acts unilaterally in choices to award state contracts.”
The contract went earlier than the Nevada Board of Examiners for last approval. Sisolak is one in every of three voting members.
Centene has equally amplified marketing campaign contributions to governors in New York and South Carolina, two states the place it has worthwhile contracts and such giving by a number of subsidiaries is allowed. And regardless of having pledged to traders to reveal its political giving, Centene has revealed to shareholders solely a portion of its contributions — omitting a lot of its subsidiary giving from studies on its web site.
Below company legislation, every subsidiary is its personal enterprise, which permits corporations to extend their political footprints in some states by giving the utmost allowed donations from multiple entity, stated Ciara Torres-Spelliscy, a legislation professor at Stetson College in Florida.
“In some instances, they’ll enhance it tenfold relying on what number of subsidiaries and the way a lot cash they need to goal at a selected politician,” Torres-Spelliscy stated. “They may exploit any loophole.”
Since 2015, the St. Louis-based insurance coverage behemoth, its subsidiaries, its high executives, and their spouses have given greater than $26.9 million to state politicians in 33 states, to their political events, and to nonprofit fundraising teams, based on a KHN evaluation of IRS tax filings and knowledge from the nonpartisan, nonprofit group OpenSecrets. That complete doesn’t embody the tens of millions of {dollars} Centene and its subsidiaries have given to state politicians’ political motion committees as a result of OpenSecrets doesn’t monitor these donations. The KHN evaluation additionally doesn’t embody giving to congressional and presidential candidates.
It’s a purposeful political funding: Centene earns billions of {dollars} from governments after which makes use of its earnings to again the campaigns of the officers who oversee these authorities contracts. The corporate has developed this subtle, multipronged technique because it pursues much more state government-funded contracts and defends in opposition to sweeping accusations that it overbilled a lot of these very governments.
Centene declined to make a consultant obtainable for an interview and didn’t reply to particular questions on its political giving. However firm spokesperson Suzy DePrizio stated in a press release that the corporate follows all native, state, and federal legal guidelines and data all contributions from its political motion committee. She stated Centene’s contributions “are meant to function help to those that advocate for sound public coverage healthcare choices, which is clear by our almost equal help of candidates from each events.”
This yr, based on IRS filings that undergo Sept. 30, Centene has given $2.2 million, mixed, to the Republican and Democratic governors’ associations, which assist elect candidates from their respective events. And Centene gave $250,000, mixed, to the Republican Attorneys Basic Affiliation and its Democratic counterpart.
Since final yr, state attorneys normal, whose campaigns are benefiting from the associations’ cash, have negotiated huge settlements with Centene over accusations the corporate’s prescription drug applications overbilled Medicaid.
Greater than 20 states are investigating or have investigated Centene’s Medicaid pharmacy billing. The corporate has agreed to pay settlements to 13 of these states, with the entire reaching about $596 million. And Centene advised KHN in October that it’s working to settle with Georgia and eight extra states that it didn’t determine. It has denied wrongdoing in all of the investigations.
KHN discovered that Centene, like many firms, additionally pays dozens of lobbyists in state capitals throughout the nation and in Washington, D.C. It courts officers with fundraising events and perks resembling tickets to sporting occasions like Sacramento Kings video games. And it helps fund committees set as much as pay for governors’ inaugural occasions — because it did for Sisolak, with a $50,000 donation, separate from its marketing campaign contributions, based on the Nevada secretary of state’s workplace.
Executives and their relations make political contributions in their very own names. For instance, from 2015 by means of 2021, Centene’s then-CEO Michael Neidorff and his spouse, Noémi, wrote at the very least $380,000 in private checks to state candidates, with greater than 60% going to California Gov. Gavin Newsom, a Democrat who governs a state the place the insurer generated 11% of its income in 2019. The Neidorffs lived in St. Louis.
There’s no proof Centene’s contributions swayed politicians’ choices, however marketing campaign finance specialists say cash can translate into entry and that may result in affect.
“They’re making an attempt to guard their market share,” stated Gerald Kominski, a senior fellow on the UCLA Heart for Well being Coverage Analysis. “They see it as essential to take care of good relations with the businesses and with the people who’re concerned in decision-making as a result of that’s the best way authorities works.”
Billing Query Surfaces in Ohio
Well being care trade gamers — from insurers, to physician lobbying teams, to drug corporations — routinely make massive political donations. Centene rival Elevance Well being, previously referred to as Anthem, has spent at the very least $21.8 million on state political contributions since 2015, based on KHN’s evaluation.
What makes Centene stand aside from opponents is the huge share of its enterprise that’s funded by taxpayers. Based as a nonprofit in 1984 by a former hospital bookkeeper, Centene earned $126 billion in income final yr — up from $5 billion a decade in the past, based on the corporate’s annual studies.
Its rocketing income has been fueled by its thriving Medicaid managed-care enterprise, takeovers of opponents, and progress in its Medicare Benefit membership and in enrollment in well being plans it sells by way of the Inexpensive Care Act medical insurance marketplaces. Centene’s Ambetter plans, obtainable on the exchanges, have the very best enrollment nationally. The corporate has additionally locked up profitable offers to ship well being care to state prisoners, navy members, and veterans.
Centene has reported that two-thirds of its income comes from state Medicaid contracts that cowl about 15 million folks throughout the nation.
So when Ohio Legal professional Basic Dave Yost sued Centene in March 2021 over what he referred to as a posh scheme of “company greed” to “fleece taxpayers out of tens of millions,” different states took discover.
Ohio investigators accused Centene of overcharging the state’s Medicaid program by means of the corporate’s pharmacy profit managers, which supplied drugs to Centene-managed Medicaid sufferers. Pharmacy profit managers, referred to as PBMs, act as middlemen between drugmakers and well being insurers and as intermediaries between well being plans and pharmacies.
Centene denied wrongdoing however confronted instant penalties. Ohio officers froze its software to resume its contract to supply insurance coverage to state Medicaid enrollees.
“Ohio had Centene over a barrel,” stated Antonio Ciaccia, a marketing consultant who labored with the state on the dispute.
The corporate settled three months later for $88.3 million. Its software was quickly unfrozen, and it gained a Medicaid contract that summer season for its subsidiary Buckeye Well being, whose lobbyists embody Michael Kiggin, a legislation faculty buddy of Republican Gov. Mike DeWine.
Dan Tierney, a spokesperson for DeWine, stated the state’s aggressive bidding course of was reviewed by a courtroom, which “famous Buckeye Well being Plan scored extremely within the bid course of.”
Since final yr, 12 different states have settled with Centene over pharmacy providers: Arkansas, Illinois, Kansas, Louisiana, Massachusetts, Mississippi, Nebraska, Nevada, New Hampshire, New Mexico, Texas, and Washington.
Of the states which have reached settlements to this point, at the very least 5 have subsequently awarded authorities contracts to the corporate. Louisiana settled with the insurer in November 2021 for $64.2 million and simply three months later awarded a statewide Medicaid contract to Centene’s subsidiary Louisiana Healthcare Connections. KHN realized of the settlement, which was not beforehand publicly introduced, in October by means of a data request.
Nebraska officers additionally hadn’t publicly introduced the state’s $29.3 million settlement with Centene in December till they obtained a latest KHN public data request. 9 months after the settlement, the state awarded Centene subsidiary Nebraska Complete Care a Medicaid contract.
One cause Centene retains profitable contracts, Kominski stated, is that such massive insurers don’t have a lot competitors in some components of the nation. “It isn’t as if states can simply say, ‘OK, we will have an open competitors’ after which they’ve a whole lot of insurers keen to take part within the market,” Kominski stated. “Well being care is just not, generally, a really aggressive market.”
Some politicians are bored with that playbook. In Mississippi, the state Home of Representatives voted in February to ban Republican Gov. Tate Reeves’ administration from awarding a contract to any firm that the state had settled with for greater than $50 million. Centene paid Mississippi $55.5 million the yr earlier than.
“I’m for casting off our enterprise to an organization who took $55 million of our cash that was imagined to be spent on the poor, the sick, the aged, the mentally sick, the disabled,” Republican state Rep. Becky Currie, who authored the modification, advised her colleagues on the Home ground.
The Home adopted Currie’s modification, however the Senate stripped it out of the invoice.
Reeves’ gubernatorial marketing campaign committee has obtained $210,000 from Centene since 2015, based on OpenSecrets knowledge, and Mississippi lawmakers and get together organizations have reaped at the very least $600,000. Reeves’ workplace didn’t reply to a number of requests for remark in regards to the donations.
In August, simply over a yr after the settlement, Mississippi awarded Centene subsidiary Magnolia Well being Plan a brand new Medicaid managed-care contract.
Displaying Up “as a Associate within the Market”
In Georgia, studies of Medicaid overbilling by insurers surfaced in 2018. The next yr, Republican Gov. Brian Kemp retained Mississippi-based legislation agency Liston & Deas to analyze, based on a letter KHN obtained.
However three years later, whereas different states have settled with Centene, Georgia has not. Centene can also be at the moment making an attempt to resume a Medicaid managed-care contract within the state.
In the meantime, the corporate, its subsidiaries, and workers have given at the very least $139,500 in contributions to Kemp since his first bid for governor began in 2017, based on state marketing campaign data.
Georgia Legal professional Basic Chris Carr’s marketing campaign has obtained at the very least $53,000 in Centene-related giving simply this yr, with most coming from firm executives, together with Centene’s new CEO, Sarah London, who gave $10,000. Carr, a Republican whose workplace would oversee any potential Centene settlement, and his spokesperson Kara Richardson stated the state Medicaid company is reviewing the billing knowledge.
Centene can also be making an attempt to resume Medicaid managed-care contracts in Florida, Texas, and New Mexico. In angling for these offers, London advised traders in September that she’s spending extra time in states speaking to key leaders as a result of “our state relationships are a important half” of the enterprise.
“Within the conversations that I’ve been having with governors,” she added, “I hear numerous constructive suggestions about the best way that Centene reveals up as a accomplice out there.”
London, her fellow high executives, and their spouses have given simply over half 1,000,000 {dollars} since 2015 to gubernatorial and attorneys normal candidates throughout the nation. Their checks had been usually dated the identical day for a similar quantity to incumbent politicians whose governments oversee Medicaid managed-care contracts in states, together with in Arizona, Kansas, and North Carolina.
“The optics of this are pay to play when choices are made,” stated Aunna Dennis, government director of Widespread Trigger Georgia, a nonprofit watchdog group. “It may very well be perceived as this well being care firm shopping for affect from lawmakers and elected officers.”
Giving Down the Poll
Centene manufacturers its well being plans beneath native names, resembling Peach State Well being Plan in Georgia and SilverSummit in Nevada. As a result of Centene has greater than 300 U.S. subsidiaries, the insurer has many avenues for political giving.
Because it did for Nevada’s governor, Centene lined up its well being plans nationwide to help the governor of South Carolina — thrice — whereas it had and renewed a Medicaid contract in that state.
In 2017, based on OpenSecrets knowledge, Republican Gov. Henry McMaster’s marketing campaign obtained $66,500, mixed, from Centene and 17 of its subsidiaries. In 2019, Centene and 10 subsidiaries gave $38,500 on a single day. Then this yr, on April 28, 11 Centene associates despatched the governor a complete of $36,000.
This yr’s contributions to McMaster’s marketing campaign weren’t included in studies that Centene has revealed about its political spending since 2020. The McMaster marketing campaign didn’t reply to questions in regards to the donations.
Additionally omitted from Centene’s revealed disclosures on its web site had been many of the contributions made by its California-based subsidiary Well being Web, which is amongst Centene’s most politically lively well being plans and is a big income maker for the corporate. Collectively, Well being Web and one other Centene subsidiary, California Well being & Wellness, gave at the very least $3.8 million to poll measure campaigns and state and native politicians from 2015 by means of Oct. 25, 2022, based on the California secretary of state’s workplace. Well being Web additionally gave $50,000 to Newsom’s inaugural committee in 2018, based on the California Truthful Political Practices Fee.
“We’d be shocked if it was an accident that contributions weren’t included within the web site report back to shareholders,” stated Bruce Freed, president of the Heart for Political Accountability, a nonprofit advocacy group that charges corporations on their disclosure of political donations.
Former Centene CEO Neidorff, who died this yr, and his spouse gave Newsom $240,800 from 2018 by means of 2020, based on the California secretary of state’s workplace. That’s on high of the $121,800 that Well being Web has contributed to Newsom’s campaigns since 2015. All of these fell inside state marketing campaign contribution limits. Neither the governor’s workplace nor his marketing campaign returned requests for remark.
The governor has pushed proposals anticipated to assist Centene and different insurers — together with increasing insurance coverage subsidies, requiring Californians to have medical insurance, and lengthening protection to immigrants no matter their authorized standing. Noémi Neidorff didn’t reply to requests for remark.
In the meanwhile, the corporate has billions of {dollars} at stake in California: The state is amongst these at the moment investigating its pharmacy billing practices, KHN has reported. And the corporate is interesting the state’s choice this summer season to not award key Medicaid contracts to Well being Web in Los Angeles, Sacramento, and different counties.
Whereas these choices are pending, the corporate has continued to ship checks to campaigns, together with to dozens of native leaders — mayors, metropolis council members, and county supervisors — in areas important to its enterprise.
Now, a few of these native leaders are writing to state officers, asking them to reverse their choice and provides Well being Web a Medicaid contract domestically, based on letters KHN obtained.
Sacramento County Supervisor Phil Serna and two of his fellow supervisors had been amongst these whose campaigns obtained checks from Well being Web. They declined to remark.
“It definitely doesn’t imply that we will’t use our meager bully pulpits to have an effect on, maybe, reconsideration of their choice,” Serna advised a gaggle of Well being Web workers who confirmed up in pink T-shirts to testify at a public listening to in September.
He had written a letter to state officers urging them to reopen the bidding six days earlier.
Phillip Reese, an assistant professor of journalism at California State College-Sacramento, contributed to this text.
This story was produced by KHN, which publishes California Healthline, an editorially impartial service of the California Well being Care Basis.
Methodology
KHN analyzed knowledge from OpenSecrets, a nonprofit, nonpartisan group that collects marketing campaign finance knowledge about political candidates and committees. Its state-level knowledge was analyzed to find out how a lot cash Centene Corp., its subsidiaries, its high executives, and their spouses gave to state candidate marketing campaign committees and poll measure campaigns throughout the nation from Jan. 1, 2015, by means of Oct. 4, 2022.
OpenSecrets doesn’t monitor state political motion committees or have full knowledge for 2022 due to inconsistent state marketing campaign finance reporting deadlines and different elements. So to search out extra contributions and cross-check those in OpenSecrets’ knowledge, KHN downloaded state-level marketing campaign knowledge, together with for political motion committees tied to particular candidates, straight from state election web sites in Florida, Georgia, Tennessee, Mississippi, and Nevada, and searched the California secretary of state’s web site for donations to each state and native officers. These numbers usually are not included within the total tally of contributions however are used to complement KHN’s reporting.
By looking OpenSecrets’ database and Centene’s political exercise studies, KHN recognized eight nonprofit political teams that supported state candidates and obtained contributions from the corporate throughout the identical timeframe, together with the nationwide associations for electing governors and attorneys normal from every get together. To calculate the contributions Centene made to these nonprofits from 2015 by means of 2018, KHN relied on knowledge compiled by OpenSecrets. For contributions from 2019 onward, KHN scoured the contribution and expenditure studies these nonprofits filed yearly with the IRS, referred to as Kind 8872, as a result of the OpenSecrets knowledge was not but full.
KHN recognized Centene subsidiaries by means of the corporate’s annual studies to the U.S. Securities and Alternate Fee and the Nationwide Affiliation of Insurance coverage Commissioners. In some instances, subsidiaries made donations earlier than they had been acquired by Centene. These donations had been excluded from the evaluation.
The findings of the evaluation had been in contrast with Centene’s company giving studies — that are posted on the corporate’s web site and date again to Jan. 1, 2020 — and KHN decided that these studies didn’t present all of the giving by Centene subsidiaries that KHN had documented from marketing campaign finance knowledge protecting that point interval.
KHN performed the identical analyses of OpenSecrets and IRS knowledge for Centene’s competitor Elevance Well being, previously referred to as Anthem.
