TennCare bill targeting Centene faces rocky road in Senate

By: - April 5, 2022 7:00 am
Inside the Tennessee Senate chambers. (Photo: John Partipilo)

Inside the Tennessee Senate chambers. (Photo: John Partipilo)

The Senate sponsor of TennCare legislation has serious reservations about changing the bill to give the nation’s largest Medicaid managed-care company a multi-billion-dollar contract after it failed to win a bid.

“That would be hard for me to accept. There’d have to be some very compelling reason to do that,” Sen. Todd Gardenhire said Monday.

Chairman of the Legislature’s Fiscal Review Committee, Gardenhire has taken a hard line on no-bid contracts approved by state departments and the Governor’s Office over the last two years.

Gardenhire, R-Chattanooga, said Monday nobody has brought him an amendment that would require the state to contract with Centene Corp., giving it a fourth provider of dual enrollment services for TennCare recipients eligible for Medicare and Medicaid. TennCare is the state’s Medicaid program for Tennessee’s poorest residents.

He did not say whether he would simply decline to continue pushing the bill, describing himself as being in a “holding pattern.” 

Sen. Todd Gardenhire, R-Chattanooga, giving a contract to Centene after the company failed to win one at bid: "There'd have to be some very compelling reason to do that." (Photo: John Partipilo)
Sen. Todd Gardenhire, R-Chattanooga, giving a contract to Centene after the company failed to win one at bid: “There’d have to be some very compelling reason to do that.” (Photo: John Partipilo)

A House version of the bill has been criticized because it contains an amendment that would give a fourth TennCare contract to Centene Corp., even though it didn’t win a bid in the state’s procurement process.

Even without that significant change, the Senate’s Health and Welfare Committee barely passed Gardenhire’s version of the measure on March 9 after the Division of TennCare objected to the legislation. The vote was 5-4.

“Since I haven’t seen the amendment and no one’s asked me to carry an amendment, (and) as far as I know nobody’s offered an amendment, we’ll just have to wait and see what happens,” Gardenhire said.

Centene has run into trouble already in Tennessee, causing the state to rebid a $123 million contraction in 2021 after allegations of bid-rigging within the Department of Correction.

Nationally, it has hit numerous snags.

In Mid-2021, Centene announced it would spend $1.25 billion to settle disputes with 22 state Medicaid systems, though the company admitted no wrongdoing, according to an Ohio Capital Journal report.

That included $55 million in a settlement with Mississippi for failing to give contractually guaranteed discounts on Medicaid drugs. 

An $88.3 million settlement with the state of Ohio centered on accusations by the attorney general that Buckeye Health, a Centene subsidiary, set up a chain of businesses that double-charged the state for services.

The article also details comments by Centene chief Michael F. Neidorff in June 2021, in which he said the company’s goal is to increase its net income margin by 3.3%, to $120 billion.

House Speaker Cameron Sexton is co-sponsoring the House version of the bill, saying it’s necessary to ensure coverage for thousands of people on a dual enrollment plan. Sexton also claims several large providers want Centene to be added as a third or fourth contractor in the TennCare program, including Vanderbilt Health System, Meharry Hospital, Cookeville Regional and Ballad Health.

Sexton has denied being swayed by Centene lobbyist, Alexandria Honeycutt Gambrell, the ex-wife of his top political adviser, Chip Saltsman. Records show Centene paid her between $100,000 and $150,000 in the last half of 2021 alone.

TennCare contends no enrollees are or will lose coverage, although some might have to switch to a different provider.

The first part of the House bill requires TennCare to renew expiring contracts with Medicare dual eligible special needs plans until the General Assembly adopts a resolution permitting non-renewal. It’s a separate issue from requiring TennCare to contract with a fourth managed care organization that failed to win in the most recent bidding, according to TennCare.

House Speaker Cameron Sexton is co-sponsoring the House version of the bill, saying it’s necessary to ensure coverage for thousands of people on a dual enrollment plan. Democratic Rep. Jason Hodges calls the legislation a form of “bid-rigging.”

State Rep. Charlie Baum, R-Murfreesboro, is sponsoring the bill in the House where it was placed “behind the budget” last week because it would cost the state $2.8 million in the first year and $30 million in the third year and afterward. It also would increase federal expenditures by $13.6 million in the first year and $59.7 million in the third and subsequent years.

The measure could be renewed once the Legislature adopts a budget for fiscal 2022-23, and Sexton’s co-sponsorship would help it receive consideration.

State Rep. Jason Hodges, D-Clarksville, questions the legislation, calling it a form of “bid-rigging.” Hodges says the total cost of the contracts is $12 billion, which would mean $3 billion for Centene if the bill passes.

Bid-rigging allegations were made in 2021 against Centurion Tennessee, another subsidiary of Centene Corp.

Corizon, a provider of mental health services for the Tennessee Department of Correction, filed a lawsuit against the state and Centene, claiming a Correction Department employee communicated frequently with a Centene executive during a bidding process, then left his state post for a plum job with the private company.

Corizon and Centene filed a settlement in January, but it was dismissed with prejudice in U.S. District Court.

 

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Sam Stockard
Sam Stockard

Sam Stockard is a veteran Tennessee reporter and editor, having written for the Daily News Journal in Murfreesboro, where he served as lead editor when the paper won an award for being the state's best Sunday newspaper two years in a row. He has led the Capitol Hill bureau for The Daily Memphian. His awards include Best Single Editorial from the Tennessee Press Association.

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