Centene is showering politicians with millions as it negotiates contracts and settles allegations of over-invoicing

Centene is showering politicians with millions as it negotiates contracts and settles allegations of over-invoicing

On November 2, 2021, Nevada Governor Steve Sisolak received 10 separate $10,000 contributions from seemingly independent health insurance plans from across the country as part of his re-election campaign.

Ohio's Buckeye Community Health Plan, Louisiana Healthcare Connections and Georgia's Peach State Health Plan were among the companies that sent money to the Democrat, according to state campaign finance records, although only one, SilverSummit Healthplan, provided insurance for the silver state.

But one thread connects the companies: Each is a subsidiary of Centene Corp., ranked No. 26 on the Fortune 500 list, and the nation's largest private managed care provider for Medicaid, the federal insurance program for people with low incomes or disabilities.

Centene already had Medicaid contracts in Nevada through its SilverSummit subsidiary - but a potential new business line was emerging. Sisolak, who is up for re-election on Nov. 8, had just approved a new public health plan option that would later be opened to bids from contractors like SilverSummit.

And then, less than two months after Centene's side contributions were made, Nevada settled with the company over allegations that the insurer overbilled the state's Medicaid pharmacy program. The attorney general's office did not publicly disclose the $11.3 million settlement, but disclosed it in response to a public records request from KHN.

Sisolak — who has accepted at least $197,000 since August 2018 from Centene, its subsidiaries, top executives and their spouses — issued a statement through his campaign spokeswoman Molly Forgey saying Medicaid contracts are awarded by an independent group. “There is no correlation between Centene’s donations and the governor’s legislation,” Forgey said. “The governor does not act unilaterally when making decisions regarding the award of state contracts.”

The contract was submitted to the Nevada Board of Auditors for final approval. Sisolak is one of three voting members.

Centene has similarly ramped up campaign contributions to governors in New York and South Carolina, two states where it has profitable contracts and such donations are permitted through several affiliates. And despite having required to disclose their political donations to investors Centene has disclosed only a portion of its contributions to shareholders — and omitted much of its subsidiary's donations reports on his website.

Under corporate law, each subsidiary is a separate corporation, allowing companies to expand their political presence in some states by giving the maximum allowable donations to more than one entity, he said Ciara Torres Spelliscy Professor of Law at Stetson University in Florida.

“In some cases they can increase it tenfold, depending on how many affiliates and how much money they want to commit to a particular politician,” Torres-Spelliscy said. “They will exploit any loophole.”

Since 2015, the St. Louis-based insurance giant, its subsidiaries, its top executives and their spouses have donated more than $26.9 million to state politicians in 33 states, their political parties and nonprofit fundraising groups, according to a KHN analysis of IRS tax returns and data from the nonpartisan nonprofit group OpenSecrets. This total does not include the millions of dollars that Centene and its subsidiaries have donated to state politicians' political action committees because OpenSecrets does not track these donations. The KHN analysis also does not include donations to congressional and presidential candidates.

It's a targeted political investment: Centene makes billions of dollars from governments and then uses its profits to support the campaigns of the officials who oversee those government contracts. The company has developed this sophisticated, multi-pronged strategy as it pursues even more government-funded contracts and defends itself against sweeping accusations that it overcharged many of these governments.

Centene declined to make a representative available for an interview and did not respond to specific questions about its political donations. But company spokeswoman Suzy DePrizio said in a statement that the company follows all local, state and federal laws and records all contributions from its political action committee. She said Centene's contributions "should serve as support for those committed to sound public policy decisions in health care, as evidenced by our near-equal support for candidates of both parties."

This year, Centene has donated a combined $2.2 million to the Republican and Democratic gubernatorial associations, which help elect candidates from their respective parties, according to IRS filings through Sept. 30. And Centene gave a combined $250,000 to the Republican Attorneys General Association and its Democratic counterpart.

Since last year, state attorneys general whose campaigns benefit from association money have negotiated massive settlements with Centene over allegations that the company's prescription drug programs overbilled Medicaid.

More than 20 states are investigating or investigating Centene's Medicaid pharmacy billing. The company has agreed to pay settlements to 13 of those states, bringing the total to approximately $596 million. And Centene KHN said in October that it was working to settle with Georgia and eight other states it did not identify. It has denied wrongdoing in all investigations.

KHN found that Centene, like many companies, also pays dozens of lobbyists in state capitals across the country and in Washington, DC. It woos officials with fundraisers and perks like tickets to sporting events like Sacramento Kings games. And it helps fund committees set up to pay for gubernatorial inaugural events — as was the case for Sisolak with a $50,000 donation, separate from his campaign contributions, according to the Nevada Secretary of State's Office.

Executives and their family members make political donations in their own names. For example, from 2015 to 2021, Centene's then-CEO Michael Neidoff and his wife Noémi wrote at least $380,000 in personal checks to state candidates, more than 60% of which went to California Gov. Gavin Newsom, a Democrat who governs a state where the insurer generated 11% of its revenue in 2019. The Neidorfs lived in St. Louis.

There is no evidence that Centene's contributions influenced politicians' decisions, but campaign finance experts say money can lead to access and influence.

“They are trying to protect their market share,” said Gerald Kominsky, senior fellow at the UCLA Center for Health Policy Research. “They see the need to maintain good relationships with the authorities and with the people involved in decision-making because that is how government works.”

Ohio Billing Questions

Healthcare industry players — from insurers to doctor lobbying groups to pharmaceutical companies — routinely make large political contributions. Centene rival Elevance Health, formerly known as Anthem, has spent at least $21.8 million on state political donations since 2015, according to KHN analysis.

What sets Centene apart from the competition is the massive portion of its business that is funded by taxpayers. Founded as a nonprofit in 1984 by a former hospital accountant, Centene had revenue of $126 billion last year, up from $5 billion a decade ago, according to the company's annual reports.

The skyrocketing revenue was fueled by its thriving Medicaid managed care business, acquisitions of competitors and growth in its Medicare Advantage membership and enrollment in health plans it sells through the Affordable Care Act health insurance markets. Centene's Ambetter plans, available on the exchanges, have the highest enrollment in the country. The company has also struck lucrative deals to provide health care to state prisoners, military personnel and veterans.

Centene has reported that two-thirds of its revenue comes from state Medicaid contracts, which cover about 15 million people across the country.

methodology

KHN analyzed data from Open secrets, a nonprofit, nonpartisan organization that collects campaign finance data on political candidates and committees. Its state-level data was analyzed to determine how much money Centene Corp., its subsidiaries, its top executives and their spouses donated to campaign committees and campaigns nationwide from January 1, 2015 through October 4, 2022.

OpenSecrets does not track state political action committees nor does it have complete data for 2022 due to inconsistent reporting deadlines on state campaign funding and other factors. So, to find additional contributions and match those in OpenSecrets' data, KHN downloaded state-level campaign data, including for political action committees tied to specific candidates, directly from state election websites in Florida, Georgia, Tennessee, Mississippi and Nevada, and searched the California Secretary of State's website for donations to state and local officials. These numbers are not included in the total number of posts but are used to supplement KHN's reporting.

By searching the OpenSecrets and Centene databases Reports on political activities, KHN identified eight nonprofit political groups that supported state candidates and received donations from the company during the same period, including the national associations for electing governors and attorneys general from each party. To calculate the contributions Centene made to these nonprofits from 2015 to 2018, KHN relied on data compiled by OpenSecrets. KHN searched for posts from 2019 onwards Contribution and expense statements These nonprofits filed annually with the IRS, known as Form 8872, because the OpenSecrets data was not yet complete.

KHN identified Centene subsidiaries through the company's annual reports to the U.S. Securities and Exchange Commission and the National Association of Insurance Commissioners. In some cases, subsidiaries donated before being acquired by Centene. These donations were excluded from the analysis.

The results of the analysis were compared to Centene's fundraising reports posted on the company's website dating back to January 1, 2020, and KHN found that these reports did not show all donations from Centene affiliates that KHN had documented in campaign finance data for that period.

KHN performed the same analyzes of OpenSecrets and IRS data for Centene's competitor Elevance Health, formerly known as Anthem.

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