The State of New Mexico is preparing to award millions of dollars in Medicaid insurance service contracts to private healthcare providers next week, but the timing could not be worse for one of the state’s current contractors that has lost billions of dollars in government health management contracts in recent months and set aside another $1.1 billion to pay fines and settlements with New Mexico and at least 14 other states over allegations of improper billing at the expense of taxpayers.
But New Mexico is not the only state where questionable billing practices have led to investigations and multimillion dollar settlements. In 2019, the company boasted that it provided Medicaid services to 25 states and numerous federal government programs. But since that time, the company has paid $613 million in fines and settlements to 14 states to settle allegations of over billing patients, many of whom are enrolled through state low-income and Medicaid programs, according to an analysis by California Health Line, a non-profit news outlet affiliated with Kaiser Health News.
Just weeks before New Mexico’s Human Services Department opened solicitations for new Medicaid providers, Centene Corp. and Western Sky agreed to pay New Mexico $13.7 million to settle allegations of improper billing and failing to provide retail pharmacy discounts to low-income New Mexicans, according to reporting in the Corrales Comment.
In July, the Office of the State Superintendent of Insurance, an independent agency responsible for enforcing insurance regulations, also claimed that “their rates are based on contracts that are in negotiations… that are not final,” a potential method of improperly setting rates billed to the state. OSI also found that Western Sky claimed to provide services at hospitals and clinics where they had no contracts to do so, potentially inflating the perceived availability of services required under the state contract. Other providers have also questioned whether Western Sky is meeting the contract requirement that the plan manager/president be a New Mexico resident. The president of record is Jean Rumbaugh who lists her location as Overpand Park, Kansas in her LinkedIn profile for the company. Neither OSI nor the AG addressed this concern in their reports.
By reaching a settlement in August that avoided any criminal or civil charges or a finding of default under the contract, the company was eligible to apply for future contracts with the state, including the upcoming Medicaid provider contract which was posted for proposals in early October. The company recently declined to disclose to the Corrales Comment whether it would seek a renewal of its New Mexico contract it has held since 2019.
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Whether those allegations and settlements impact future contracts like New Mexico’s is not yet known, but the company was dealt two major blows since the majority of those settlements were announced.
In December, the US Department of Defense awarded the longtime Centene-managed TRICARE health insurance contract to another company. That contract was worth a reported $65.1 billion and includes a contract with UNM Hospital. California also recently awarded a part of a Centene-managed contract covering two of the state’s most populous counties to a competitor during their recent open solicitation process. It did renew Centene contracts for other parts of the state.
New Mexico’s program appears to be next in line to make contract awards. The State is expected to announce its “intent to award,” or finalist, on January 16th according to the solicitation timeline published last year.
If the company applied, New Mexico could possibly be the first statewide program to cancel with the company. It could also be the first to renew since the latest claims were settled.