WHY DELAWARE SHOULD CARE:
Centurion managed health care services for thousands of state prisoners while reaping contracts valued at more than $70 million a year that were paid for by state taxpayers. The company is already facing a lawsuit from the ACLU over its treatment of inmates.
Centurion, the company that managed health care in Delaware prisons during the COVID pandemic, is being sued for fraud by two whistleblowers in a Superior Court lawsuit that has been sealed from the public for the past five months.
While details of the suit and of a parallel investigation by Delaware Attorney General Kathy Jennings are not publicly known, the actions add to a mountain of legal scrutiny for the health care operations of what previously was Centurion’s parent company, Centene Corp.
Centene, a $40 billion health care conglomerate, currently runs Delaware’s Medicaid program. Early last year, it sold Centurion to an undisclosed buyer.
In recent years, Centene has faced shareholder actions probing its prison health care policies, a class-action suit brought by the American Civil Liberties Union (ACLU) on behalf of Delaware inmates, and allegations from more than a dozen state attorneys general that the company systematically overcharged Medicaid programs.
Taken together, the claims allege a willful mismanagement of states’ health care programs that are relied upon by many of the country’s most vulnerable people.
In 2021, when announcing an $88 million settlement with Centene, Ohio’s attorney general said the company took “sophisticated” steps known only to top level employees to “bill unearned dollars.”
“It has taken a huge effort by my team to untangle this scheme,” the attorney general, Dave Yost, said then.
The Delaware whistleblowers lawsuit was first revealed last fall when its case docket appeared on a state court database. Weeks later, it disappeared from the same database.
The initial public docket entry indicated that Philadelphia attorney Dan Miller filed the case in September, alleging fraud under the Delaware False Claims and Reporting Act. The Delaware Department of Justice later opened a confidential investigation into the matter, according to the docket.
The Delaware False Claims and Reporting Act allows whistleblowers alleging fraud in government contracts to sue a private contractor, and to list the State of Delaware as the plaintiff in the case.
Officials from the Delaware Department of Justice declined to comment for this story.
Miller also declined to comment. In December, he secured a $47 million settlement with ChristianaCare as part of a separate, federal False Claims Act case.
Weeks after Miller brought the Centurion case, the ACLU of Delaware filed a class-action lawsuit claiming that the company’s health staff in state prisons routinely failed to treat illnesses, leading in some cases to prisoners’ deaths.
The ACLU further claimed that the failures were a direct result of Centurion’s policies, which they said amounted to “callous and deliberate indifference.”
Also named as defendants in the case is Delaware’s new prison health care provider, VitalCore Health Strategies, and five Delaware Department of Corrections officials.
In December, Centurion’s attorneys argued in a motion to dismiss the class-action suit that the ACLU had “not plausibly alleged” that the company had any such policies “of deliberate indifference toward inmates’ serious medical needs.”
“Plaintiffs have not identified a specific Centurion policy or practice that caused the alleged deficiencies in their medical treatment,” the company’s attorneys said in the motion.
Because the whistleblower case remains sealed, it is not known if it and the ACLU lawsuit share similar allegations.
Still, the ACLU’s claims do echo those made about Mississippi prisons in a 2020 lawsuit filed in Delaware Court of Chancery by a Centene shareholder, who was later linked to the rapper and businessman Jay-Z.
That suit — which demanded internal company documents about the provision of health care in Mississippi prisons — stated that Centene had “a long history of failing to provide proper health care to the prison populations.”
That same year, a doctor inspecting the Mississippi State Penitentiary, on behalf of another lawsuit brought by Jay-Z, called living conditions there “sub-human and deplorable in a civilized society.”
A Delaware judge dismissed the Chancery Court case in November 2020.
‘The unanimous choice’
Centurion came to Delaware in 2020 with the promise of bringing professionalism back to the state’s prison health care system after years of mismanagement by its predecessor, Connections Community Support Programs Connections.
When announcing the new contract at the time, Centurion CEO Steven H. Wheeler said his company was committed to working with state officials to improve prison health care.
Claire DeMatteis, then-commissioner at the Delaware Department of Correction, told The News Journal then that Centurion had “deep experience providing quality medical care.”
“Centurion was the unanimous choice,” she said at the time.
But, three years later, Centurion lost the prison contracts – valued at more than $70 million a year — when state officials opted not to automatically renew the agreements.
The decision occurred shortly after Centene sold off its Centurion subsidiaries to an undisclosed buyer.
Shortly thereafter, Delaware officials announced VitalCore Health Strategies as the state’s new provider of prison health care, which includes mental health and addiction services.
In the announcement, then-DOC Commissioner Monroe B. Hudson said VitalCore has a “strong track record of success providing high quality medical and behavioral health care to patients.”
“We look forward to our partnership with VitalCore to advance this important work at the best value for Delaware taxpayers,” Hudson said in the announcement last spring.
Five months later, VitalCore was named as a defendant alongside Centurion in the class-action lawsuit the ACLU filed on behalf of inmates.
On Wednesday, the DOC’s newest commissioner, Terra Taylor, said VitalCore is “doing well,” but added that the company has found it challenging to fill its staff positions in Delaware prisons.
“When you’re talking about hiring someone to work in a correctional setting; it’s a difficult job,” Taylor said.