An investor in Centene is taking the largest Medicaid-managed health insurance company in the United States to court, seeking access to company records to determine how much responsibility its leaders will bear for the company’s estimated $1.25 billion in drug fraud settlements.
Shareholder Robert Garfield filed a lawsuit in the Delaware Chancery Court on Tuesday. According to state law, shareholders have the right to inspect the company’s internal books and records. The complaint stated that the plaintiff aimed to determine whether the company’s leaders violated their fiduciary duties and committed wrongdoing.
Based on public company reports, speeches and decisions, Garfield argued that “the board and management either knew or should have known their arbitrary compliance methods to promote and allow widespread fraud,” the lawsuit states.
Centene did not respond to an interview request.
The for-profit insurance company has set aside $1.25 billion to resolve allegations that its now-defunct pharmacy benefits manager Envolve defrauded the state’s Medicaid program. this Put aside for Those ones Case study Yes equal arrive more Compare half this company’s 2020 year profit, this litigation Say.
So far this year, Centene has paid a total of $214 million in funding to the Medicaid programs in Arkansas, Illinois, Mississippi, and Ohio.
On the same day Garfield filed the lawsuit, the Kansas State Attorney announced that Centene would pay another 32.4 million USD Exceed its PBM business. More than a dozen other states have hired law firm Liston & Deas to investigate the Medicaid billing and recovery practices of Centene and other PBMs, and states say they have avoided bans on price differential pricing.
Garfield claimed that these settlements would reduce Centene’s bottom line and threaten its ability to obtain a new Medicaid contract. The complaint claims that allegations of fraud have also damaged the company’s reputation among policymakers, taxpayers and investors.
In August, Garfield requested records related to Centene’s compliance program. According to the lawsuit, Centene denied him.
In October, Garfield tried again and asked to check the records of previous board meetings, company compliance policies, and medical assistance bill receipts. He claimed that later that month, the two parties talked about Centene’s hope that Garfield would sign a non-disclosure agreement before handing over hundreds of documents related to its PBM business.
The following month, Centene submitted a proposed non-disclosure agreement to Garfield. Garfield used his editor to return the contract, which included deleting a clause that would prevent him from seeking additional legal action after viewing the records. The complaint stated that Centene’s response was to restore the language in another version of the agreement.
The lawsuit states that so far, the two have not reached an agreement on the language of the confidentiality agreement, and Centene has not provided any materials related to the pricing of its Medicaid drugs.
“The company’s long delay in negotiating its desired non-disclosure agreement is
Show its obstructive practices,” the complaint said.
Garfield seeks to access these records, reimburse court fees, and any other relief that the court considers fair and just.
Centene has signed Medicaid contracts in 30 states, covering 14 million registrants. The company reorganized its PBM in 2019, acting only as a third-party administrator, and is now looking for external operators to manage its annual drug expenditures of US$300 billion.
Last month, hedge fund Politan Capital Management acquired a US$900 million stake in Centene as part of its bid. Cheer up The leadership and operation of the company.