One of America’s richest companies pays Kansas $27.6 million over Medicaid ‘misconduct’

Kansas Attorney General Derek Schmidt says Centene kept Kansas in the dark about drug discounts and used other strategies to squeeze more profit out of the state’s Medicaid program.

by Celia Llopis-Jepsen, Kansas News Service and KCUR

Kansas Attorney General Derek Schmidt has reached a settlement with one of the nation’s wealthiest companies for about $27.6 million over alleged misconduct involving the state Medicaid program and prescription drugs.

Centene Corp. helps run the state’s privatized Medicaid program. Schmidt says secretive practices at the company cost Kansas and its taxpayers many millions of dollars.

Schmidt says the $27.6 million settlement is more than twice the amount of damages that his office was able to prove.

“We think that’s a just outcome,” he said in an interview. “It penalizes the company for its misconduct.”

Centene faces similar accusations in other states regarding its role as a pharmacy middleman hired to help states get good drug prices. It has denied wrongdoing.

However, the corporation — No. 24 on the Fortune 500 — is cutting massive checks to states over the allegations and has earmarked $1 billion for more settlements.

Earlier this year, Centene announced settlements with Ohio for $88 million, Mississippi for $55 million, Illinois for $56 million and Arkansas for $15 million.

Centene and its subsidiary Envolve help run Medicaid programs in 30 states. It sent the Kansas News Service a brief statement describing the settlement as a “no-fault agreement.”

“We respect the deep and critically important relationships we have with our state partners,” the statement said. “This no-fault agreement reflects the significance we place on addressing their concerns.”

Schmidt said Centene agreed to change its practices.

“Regardless of whether there’s an explicit admission (by Centene of wrongdoing),” the attorney general said, “ they’re paying millions of dollars for their past behavior and agreeing that their future behavior will change.”

Centene continues to help run the Kansas Medicaid program, but it will have to compete to retain that role when the Kansas Department for Health and Environment opens an upcoming round of bidding.

Negotiated settlement

Schmidt said Centene engaged in a slew of strategies that meant Kansas taxpayers overpaid for prescription drugs.

For example, it would charge Kansas one price for a medication, while getting a lower price from the manufacturer, he said. Centene could then pocket the savings by keeping Kansas in the dark about the true price.

“The misconduct was in the nature of finding ways to lower the cost of acquiring drugs, but not passing the savings on to the state,” Schmidt said. “Now the company will provide detailed pricing for every step of a transaction. And that in turn will allow the state to maintain a much more effective type of oversight.”

Schmidt wouldn’t disclose the exact amount of money that Centene’s strategies, including the secret manufacturer discounts, cost the state of Kansas. He said his office and Centene remain at odds over the sum.

The settlement covers 2016 through last month. Schmidt said Centene’s misconduct may have started earlier than 2016. If it did, that would fall outside the statute of limitations.

His office was prepared to sue Centene, but the corporation settled to keep the matter out of court.

Part of the settlement money — 15% — will go to Liston and Deas, a law firm that is helping states investigate and pursue settlements from or potential lawsuits against Centene.

Other investigations

Centene is one of three main companies that help run the Kansas Medicaid program.

The other two are CVS/Aetna and OptumRx/UnitedHealth.

Among other things, they serve as the pharmacy middlemen, processing drug claims for Kansas.

Those three also helped handle prescription drugs for the Ohio Medicaid program when that state’s auditor concluded in 2018 that its middlemen charged $225 million more than they paid to pharmacies for drugs and took that money as profit.

The markup on generic drugs alone added nearly a third to the price that state paid for those supposedly cost-effective drugs. Ohio effectively fired the companies involved and restructured its program to increase oversight.

The revelations in Ohio triggered other state auditors and attorneys general — including Schmidt — to start scrutinizing their states’ Medicaid programs.

Asked whether his office is investigating any other companies regarding the Kansas Medicaid program, Schmidt said he can’t discuss the status of investigations or their targets. But he added:

“We’ve been able to obtain recovery with respect to this first defendant. And … we have other investigations ongoing.”

Kansas privatized Medicaid in 2013 under Gov. Sam Brownback.

But the Brownback administration and subsequent Jeff Colyer and Laura Kelly administrations have never audited the prescription drug program.

Investigations in other states and at the federal level have found that privatized state Medicaid programs are especially vulnerable to overpaying for medications, because oversight becomes even more difficult.

Middleman practices

Concerns about pharmacy middlemen — formally called pharmacy benefit managers — extend beyond Medicaid programs.

Employers also hire middlemen to process drug claims.

Experts say the Kansas State Employee Health Program, which covers about 80,000 public employees, retirees and family members, could be overpaying by millions.

Private employers face similar challenges. Secrecy in the nation’s drug supply chain makes it hard for them to figure out why medications cost so much, and whether drug middlemen hired to keep costs down actually inflate the prices.

Americans pay more than twice as much as people in other developed countries for prescription drugs.

Schmidt wouldn’t say whether he is probing prices paid by the Kansas state employee plan. As for challenges faced by private employers:

“That’s conduct that we’re not going to be able to reach directly through our enforcement on behalf of the state,” Schmidt said. “There are policy discussions that the Legislature may want to undertake.”

Over the past few years, states have passed dozens of laws demanding more transparency of pharmacy middlemen or regulating them in other ways.

Pharmacy middlemen sued one of those states, Arkansas, to block regulation. Arkansas fought the matter all the way to the U.S. Supreme Court, which ruled in its favor. That’s likely to embolden more states to consider legislation.

Schmidt signed an amicus brief supporting Arkansas’ right to regulate pharmacy benefit managers.

“It would make sense for Kansas to have a regulatory statute, similar to what’s done in Arkansas,” he said. “This is a largely unregulated area where there’s strong reason to believe … that regulation is advisable.”

Celia Llopis-Jepsen reports on consumer health for the Kansas News Service. You can follow her on Twitter @celia_LJ or email her at celia (at) kcur (dot) org.
The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy. Kansas News Service stories and photos may be republished by news media at no cost with proper attribution and a link to ksnewsservice.org.
See more at https://www.kcur.org/news/2021-12-06/one-of-americas-richest-companies-pays-kansas-27-6-million-over-medicaid-misconduct.

Even in the most Hispanic cities in Kansas, getting elected as a Latina is an uphill battle

In a pair of predominantly Hispanic southwest Kansas communities, two women try to become the first Latinas voted into local office. Elections in November showed both how far Latina candidates have come and how many barriers they still face.

by David Condos, Kansas News Service and High Plains Public Radio

Liberal, Kansas — Janeth Vasquez’s journey is a common story in southwest Kansas.

Her parents immigrated to Kansas from Mexico in the 1980s, seeking a better life for their baby daughter in the growing Hispanic community that rose up around Liberal’s meatpacking plant.

But what Vasquez accomplished when she became the first Latina ever elected to office in Kansas’ most Hispanic city was anything but common.

“I feel like there’s no representation for us,” Vasquez said. “Latinos account for the largest portion of our population. … But at the end of the day, the largest demographic of people that have the power in town are not the Hispanics.”

Her win signified a landmark accomplishment for all the immigrant families like hers who have come to southwest Kansas over the past few decades. But it also highlights the inequities and barriers that have historically kept the region’s representation from looking more like its residents.

Kansas is rapidly becoming more Hispanic. The number of Latino residents statewide has nearly tripled since 2000. Roughly one of every five Kansans is now Latino. But the shift to increasing Hispanic representation in local government hasn’t kept pace.

Data from the National Association of Latino Elected and Appointed Officials shows that out of 3,804 elected city positions across Kansas, only four officials are Hispanic.

Even in the two most Hispanic cities in the state of Kansas, Liberal and Dodge City, campaigning to become the first Latina woman elected to either city’s local office presents an uphill battle.

As Vasquez and Blanca Soto, a candidate for the Dodge City commission, made their final push to reach potential voters the week before the election, they walked door-to-door trying to turn out new voters in working class, primarily Hispanic neighborhoods where most people running for local office don’t bother stopping.

“That’s what makes it or breaks it,” Soto said, walking through the Dodge City neighborhood she grew up in. “You can send mailers. You can do social media. But until you make that connection, I think that’s what really makes a difference.”

But as Soto and Vasquez walked from one house to the next, the layers of challenges facing their campaigns, and others like them, became evident.

Fewer than half of Hispanic Kansans meet the criteria to even register to vote. Many of the people Soto and Vasquez talk with aren’t citizens. Some who are citizens haven’t registered to vote or don’t know how. Even among registered voters, many didn’t know about the city election.

Even though Hispanic residents make up roughly two-thirds of each city’s population, neither place had ever voted a Latina into local office.

And when the election results rolled in, they served as a reminder that electing a Latina to any office in Kansas, even in its most Hispanic regions, remains exceedingly rare. Soto came up short.

“At the end of the day,” Soto said, “we know that it’s going to take time to create sustainable change.”

Expand the electorate

So why is it such a challenge to get Latina candidates elected, even in predominantly Hispanic cities like Liberal and Dodge?

For one, looking at the population demographics alone doesn’t always tell the whole story.

“While that community may be 62% Latino,” said Erica Bernal-Martinez, the chief operating officer of the National Association of Latino Elected and Appointed Officials, “it doesn’t mean that the electorate is made up of majority Latino voters.”

In Kansas, just 43% of Hispanic residents can register to vote, meaning they are U.S. citizens over the age of 18. That’s compared with 72% among non-Hispanic white Kansans. And even for Hispanic Kansans who are eligible to become a citizen, it’s a process they may not have the time and money to complete. For example, a Pew Research report shows that a majority of Mexican immigrants who would be eligible for citizenship haven’t taken that step.

Overall, the share of Kansas voters who are Hispanic more than doubled since 2000, now up to 7%. That’s a larger share than Hispanic voters have in neighboring states like Missouri, Nebraska and Oklahoma. But it’s still a small fraction compared with the 82% of Kansas voters who are non-Hispanic whites. And nationwide, Hispanic voter turnout has historically lagged behind white voter turnout.

So in order to succeed, Bernal-Martinez said Latino candidates often need to get more votes from a smaller pool of voters who don’t often participate in politics.

“They’re needing to actually work at expanding the electorate,” she said, “bringing in new voters who have never been part of the process, mostly because no one has invited them to participate.”

She said when those communities are invited, however, the strategy can work and pay dividends for years to come. But it takes the type of one-on-one conversations that Soto and Vasquez took on in Dodge City and Liberal — answering people’s questions one-on-one on their porches, validating people’s voices and concerns.

That’s a slow process. And an extra burden.

“It’s almost like this double job that gets stacked on for them in growing and expanding the electorate,” Bernal-Martinez said. “And that takes time. … And it takes a lot of work. And it takes more money.”

It also illustrates some of the other barriers that have likely kept Hispanic Kansans from running for office: the time, money and know-how that it takes to mount a campaign.

Like Soto and Vasquez, many are second-generation immigrants from working-class families. And especially for those who are breaking new barriers in their community, they’re likely to have few connections to the white power structure that translates to fundraising and exposure.

And then there’s the backlash Latina candidates themselves risk facing when they throw their hat into the ring.

“On top of all the other challenges — you have to learn the process, you have to learn … all of the rules and the regulations,” Janeth Vasquez said, “and then just to top it off … we still have to deal with racism.”

During the campaign, she said she regularly got aggressive calls on her cellphone from people accusing her of planning to bring more undocumented immigrants to town. She received similar attacks on social media and saw a prominent community member start false rumors about her.

But not only did she not make immigration issues part of her campaign platform, that’s not even the type of issue the city commission oversees.

“I truly believe that a lot of this has been brought up because of my race,” she said. “They’re trying to intimidate me. And I’m not intimidated.”

She found support in a group text thread with Soto, Lenexa’s Melanie Arroyo and other Kansas Latinas running their first campaigns where they encouraged each other and shared tips. But Vasquez said she actually encountered more racism in her town — which, again, is roughly two-thirds Hispanic — than other Latina candidates she talked with experienced in eastern Kansas.

And she said the most common advice she got from people in Liberal, even other Latinos, is that she should play down her ethnicity if she wants to win.

“I know there’s racism across Kansas,” she said, “but I thought here in Liberal we were better than that.”

Turning point

Delia Garcia knows about waging this type of uphill battle too.

She broke a similar barrier herself back in 2004 when she was elected as the first Latina in the Kansas Legislature. Now, she’s passing along the lessons she’s learned to the next generation of Hispanic leaders as an adviser with the Kansas Latino civic engagement project.

Vasquez and Soto were among the few dozen Hispanic Kansans who completed the group’s training sessions over the past few months. Garcia said eight of those attendees ended up running for office this year.

“It’s absolutely an exciting turning point,” she said. “This moment is a proud Kansas, American, woman, Latino moment, and we don’t have to be Latino or Latina to appreciate and be excited about it.”

She’s seen more interest recently from young Latinas who want to get involved in the political process across the state, and expects the trend to continue in the coming political cycles.

With the state’s Hispanic population projected to grow by nearly 300% over the next 45 years, she said electing more leaders who reflect the people they represent sends a powerful message to those communities that they belong here.

“It is not only empowering, but it’s necessary,” she said. “And if you ask me, it’s about dang time.”

And for Janeth Vasquez, Blanca Soto and other Latinas across Kansas, the work is just beginning.

Soto, who was appointed to the city commission earlier this year to fill the remaining term of Dodge City’s resigning mayor, said she will use that short stint of experience to train other Latinas considering a run for local office. She hasn’t ruled out running for city commission again in 2023, but she plans to focus on local voter registration efforts over the next year to continue building the base of Latino voters for future elections.

“Hope is the last thing we lose, right?,” Soto said. “So I might lose the election, but I’m not going to lose hope.”

As she prepares to take office, Vasquez hopes that Hispanic families in town will finally be able to come to the local government to voice questions and concerns — in their native language — which may otherwise go unheard.

And she wants her election to show other young Latinas across Kansas that they can take that step, too.

“Women and women of color deserve a seat at the table where decisions are being made,” Vasquez said. “And while I may be the first woman elected to this position, I will not be the last.”

David Condos covers western Kansas for High Plains Public Radio and the Kansas News Service. You can follow him on Twitter @davidcondos.
The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.
Kansas News Service stories and photos may be republished by news media at no cost with proper attribution and a link to ksnewsservice.org

See more at https://www.kcur.org/news/2021-11-24/even-in-the-most-hispanic-cities-in-kansas-getting-elected-as-a-latina-is-an-uphill-battle.

Flags at half-staff to honor Sen. Dole

Gov. Laura Kelly has ordered flags throughout Kansas to be flown at half-staff to honor Sen. Bob Dole, who died on Sunday.

The flags will be at half-staff until sunset on Dec. 9.

“I was deeply saddened to learn of the passing of Bob Dole this morning,” Gov. Laura Kelly said on Sunday. “Senator Dole was many things — a war hero, a father, a husband, a public servant; and to Kansans, a man who embodied everything good and decent about Kansas and about America.

“In public office, Senator Dole was always a voice for Kansas. However, his work in the Senate also had a profound impact on all Americans. Most notably, his efforts to protect Social Security in 1983 and to ensure passage of the Americans with Disabilities Act in 1990, which transformed the lives of those living with a disability.

“Senator Dole’s legacy goes far beyond the walls of Congress. He was a larger-than-life presence in our nation’s politics and demonstrated a decency, a humility, and a civility that should serve as a model for those of us in public life.

“My thoughts are with his wife, Elizabeth, his family and all those who loved Bob Dole.”

Gov. Kelly also has ordered flags in Kansas to remain at half-staff on Tuesday, Dec. 7, in recognition of National Pearl Harbor Remembrance Day.

“This year marks the 80th anniversary of an unforgettable tragedy – when Imperial Japan launched an attack on Pearl Harbor, killing thousands of U.S. personnel and civilians,” Gov. Kelly said. “I encourage all Kansans to join me in honoring those killed on December 7, 1941, and in recognizing all veterans and service members who have given their lives in the defense of our country.”

Flags will remain lowered until sunset on Dec. 9, 2021, in accordance with the proclamation signed by President Joe Biden honoring the passing of Senator Bob Dole.