Medicaid Insurer Faces Billion-Dollar Repercussions for Hiring Private Investigators

A Texas House committee has enlisted the state auditor’s help with an inquiry into a Medicaid insurer whose former CEO admitted hiring private investigators to dig into the personal lives of patients, providers, and lawmakers. The committee’s chairman, Southlake GOP Rep. Giovanni Capriglione, is also demanding that Superior HealthPlan immediately face billion-dollar repercussions for its actions.

According to letters sent to state officials and obtained by The Dallas Morning News, Capriglione is asking that Superior be removed from consideration for at least $1 billion in state Medicaid contracts that are under procurement. The proposed sanctions come after Superior CEO Mark Sanders admitted to the company’s actions under questioning by the committee on March 26.

Background of the Investigation

The admission launched an investigation by the Texas Attorney General and an inquiry by the panel, both of which are still going on. The admission also led to Sanders’ termination by the company, which said at the time that it did not endorse the long-abandoned practice of hiring private investigators to collect data on the personal lives of lawmakers who oversee the state’s healthcare regulations.

At least one North Texas lawmaker has filed legislation prohibiting the practice. In a Thursday letter signed by the committee, lawmakers requested that Texas State Auditor Lisa Collier help them procure a host of financial and compliance information about Superior HealthPlan and its parent company, Centene Corporation.

Request for Information

That includes any evidence of irregularities or comingling of state funds with private revenues or contractors not previously disclosed, contract violations such as overbilling the state, information on whistleblower reports and compliance audits, and records of internal oversight and disciplinary actions — among a host of other items.

The information would be used in the committee’s investigation into whether the company broke any laws in its actions or in state contracts. Also on Thursday, Capriglione sent a letter to Texas Human Services Commissioner Cecile E. Young asking that the agency suspend Superior’s ability to take on new Medicaid members, prohibit new contracts from being awarded, and switch state foster kids who get Medicaid through the MCO to another insurer.

Superior’s Conduct

Superior’s conduct “exemplifies” why the committee was created in the first place, Capriglione wrote in the letter. “More facts concerning Superior’s use of private investigators to spy on legislators and its own members undoubtedly will be uncovered in the coming weeks and months,” Capriglione wrote.

“But Mr. Sanders’ testimony alone warrants HHSC taking immediate action with respect to Superior to protect Texas taxpayers, Medicaid enrollees, and the integrity of our state’s healthcare system.” In a statement to The News, Capriglione called the actions by Superior “appalling” and said they “demand immediate attention.”

Response from Centene Officials

“Surveillance of vulnerable Medicaid patients and lawmakers is not just unethical; it’s a betrayal of public trust and an abuse of taxpayer dollars,” Capriglione said. Centene officials, in a statement to The News, said they plan to respond directly to Capriglione, but that they respect the concerns raised in the letter and are “committed to accountability and cooperation.”

Officials hope to help the chairman and committee understand that the investigations did not involve physical surveillance or any investigators sent to Texas, the statement said. They urged caution as state officials consider hindering their presence in the state, saying it could have unintended consequences to the company’s 1.7 million members in Texas.

Private Investigations

At the center of the probe is a series of private investigations, starting in 2017 and allegedly ordered by Sanders, who had just taken the helm as chief executive of Superior. The health care firm was facing lawsuits at the time over declining coverage.

DOGE committee members raised serious questions about the intent behind these actions, including whether Superior sought to gain leverage over legislators to help secure Medicaid contracts. It is not known at this time whether Superior informed State Legislators of embarrassing or compromising information the company’s investigators found on them.

Background Checks

In March, DOGE lawmakers convened a hearing to question Superior HealthPlan about that after receiving information on the investigations. Superior is among several MCOs in Texas — including three nonprofit plans run by children’s hospitals in the state — fighting a proposed $116 billion procurement that would reassign some 1.8 million impoverished Texans to new Medicaid healthcare insurance plans and shut down several nonprofit plans.

Sanders told lawmakers during the hearing that investigators had done “routine” background checks into several state representatives, senators, health care providers, patients and their families and a journalist several years ago. “We’ve done what I would call general research,” Sanders told them. “Anything that’s publicly available.”

Conclusion

The actions of Superior HealthPlan have raised serious concerns about the company’s conduct and its impact on the state’s healthcare system. The committee’s investigation and the Attorney General’s review will help to determine the extent of the company’s wrongdoing and the necessary consequences.

It is essential for the state to take immediate action to protect Texas taxpayers, Medicaid enrollees, and the integrity of the healthcare system. The state must act decisively to hold corporations accountable and ensure that such unethical behavior is not tolerated in the future.

Frequently Asked Questions

Q: What is the issue with Superior HealthPlan?

A: Superior HealthPlan, a Medicaid insurer, hired private investigators to dig into the personal lives of patients, providers, and lawmakers, which is a serious breach of trust and ethics.

Q: What actions is the committee taking?

A: The committee is investigating the matter, requesting financial and compliance information, and asking the state auditor to help with the inquiry. The committee is also demanding that Superior face billion-dollar repercussions for its actions.

Q: What is the potential impact on Medicaid patients?

A: The company’s actions could jeopardize care for vulnerable Texans, including foster children in the STAR Health program, and place thousands of jobs at risk if the state hinders Superior’s operations before the Attorney General’s review is complete.

Q: What is the next step in the investigation?

A: The committee will continue its investigation, and the Attorney General’s review will help to determine the extent of the company’s wrongdoing and the necessary consequences. The state will take immediate action to protect Texas taxpayers, Medicaid enrollees, and the integrity of the healthcare system.