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Lawsuit Alleges Insurance Giant Centene Misleads Subscribers

Posted on 01-12-18 in Addiction

By Lise Millay Stevens

Lawsuit Alleges Insurance Giant Centene Misleads Subscribers

According to a detailed report published in The Hill yesterday, insurance behemoth Centene is at the center of controversy again. Less than two weeks into the new year, the company has been slapped with a class-action lawsuit due to inadequate networks of providers and hospitals in the company’s Affordable Care Act (Obamacare) exchange plans. The suit, filed in Washington state, charges that customers in 15 states who bought Centene insurance via the ACA exchanges could not find in-network doctors and hospitals, and that physicians advertised as being in network were not actually covered by subscriber plans.

The language in the lawsuit makes clear that the insurer’s practices to lure subscribers is deemed deliberately deceptive; part of the document reads, “Centene misrepresents the number, location and existence of purported providers by listing physicians, medical groups and other providers — some of whom have specifically asked to be removed — as participants in their networks and by listing nurses and other non-physicians as primary care providers.”

The suit was filed on behalf of two Centene customers, but seeks class-action status to represent all customers who purchased Centene plans on ACA exchanges. According to The Hill article, a spokeswoman for Centene pushed back against the allegations, responding, “We believe our networks are adequate.”

The great irony is that Centene has been making billions of dollars in profits off of Obamacare subsidies and other plans (a whopping $239 million profit alone in the third quarter of 2017, a 22 percent increase from the same period in 2016). The price of Centene’s shares has been rising as their earnings explode; this latest lawsuit suggests that providing ‘skinny’ provider and hospital networks may be contributing to the company’s wealth.

And the profit grabbing isn’t over with; even as other insurance companies find themselves in the red and pull out of the ACA marketplace, Centene has announced plans to offer ACA exchange policies in Kansas, Missouri and Nevada in 2018, and expand such policies in six other states, according to Forbes. So where does all that money go?

For one thing, according to shareholder advocacy group As You Sow, Centene CEO Michael Neidorff  is one of the most overpaid U.S. executives, with a salary that tops $22 million annually. The public is taking note. After Neidorff received an award in 2017 from Ferguson, Missouri, a reader mockingly noted in the St. Louis Post-Dispatch, ‘”Citizen of the Year Has Helped Himself the Most.” The letter-writer stated, “Centene’s billions of dollars of annual revenue comes from managing Medicaid programs across the country. The company paves the way for acquiring contracts with bushel-barrels full of cash.”

The letter-writer also criticized the insurer’s political contributions. “As a 2012 Post-Dispatch story on Centene put it, ‘To help get those deals, Centene fields an army of lobbyists with a war chest for political and charitable contributions.’ Last year, Centene contributed $250,000 to the campaign for Proposition P, the half-cent sales tax increase in St. Louis County. The increased sales tax falls hardest on low-income families.”

The most recent lawsuit reflects similar allegations, stating that Centene deliberately targets low-income customers who qualify for substantial government subsidies “while simultaneously providing coverage well below what is required by law and by its policies.”

This latest lawsuit adds to the extant unflattering picture of the insurer’s refusal to fulfill their contracts with subscribers. In 2017, a lawsuit against Health Net, a subsidiary of Centene, was brought by a family who alleged that a family member perished awaiting a liver transplant, citing the loss was ‘death by bureaucracy’ because there were no providers on her plan that could perform the surgery. The patient waited months for Health Net to work out a letter of agreement with an out-of-network provider, and expired before arrangements were made.

In November of 2017, a USA Today affiliate, AZ Central, reported that Health Net (along with another insurer, TriWest) improperly collected approximately $89 million from the U.S. Veteran’s Administration. The surplus was brought in by billing the VA more than once for the same service, billing for services covered by private insurance, billing the VA more than Health Net had paid providers for services, and not requiring medical providers to follow rates set by Medicare or contracts.

But wait; there’s more. Health Net has repeatedly been under investigation by state and federal authorities amid allegations that the insurer has stiffed dozens of addiction rehab facilities, even as the U.S. opioid crisis explodes and the number of adequate treatment centers shrinks. Health Net’s refusal to pay for substance use and behavioral health services caused respected recovery facilities to close, while forcing other providers to waste resources on providing the insurer with inordinate amounts of documentation for treatment that the insurer had already authorized.

The torrent of allegations against Centene/Health Net practices is disturbing given the company’s plans to expand into new markets. Currently, profits seem to flow to the top of the organization while some subscribers are denied critical medical care. Given the barrage of lawsuits and investigations, the insurance giant may be forced to clean up its act in 2018. One can only hope.