Why Should Delaware Care?
Delaware spends millions of taxpayer dollars on its prison healthcare annually to treat medical and behavioral issues for inmates. But according to a whistleblower lawsuit filed by two employees that worked for the state’s former prison healthcare provider, Centurion of Delaware, the company routinely billed the state for services it did not provide.
Late last month, Delaware’s embattled former prison healthcare provider rebuked allegations that it engaged in fraud by requesting payment for medical services for inmates it did not provide.
The former provider, Centurion of Delaware, was the sole contractor responsible for providing health services to inmates at the state’s prisons during the COVID pandemic. It responded last month to a whistleblower complaint filed by two former employees, denying the fraud allegations.
Centurion’s multi-billion-dollar parent company, Centene, was also named in the lawsuit on claims the healthcare provider denied patients care and falsified claims to taxpayer insurers like Medicaid.
At the center of their lawsuit, the whistleblowers claim Centurion fraudulently charged the state for services inmates never received, and it systematically passed inmates through programs they did not complete, like drug treatment programs.
The lawsuit also alleges a pattern of medical staff denying care to patients.
For years, healthcare providers inside Delaware prisons have been under scrutiny for either financial mismanagement or denial of care to patients, including the state’s current provider, VitalCore Health Strategies.
Earlier this year, the State of Delaware also joined the case after a review of the whistleblowers’ materials.
Reuben Guttman and Dan Miller, lawyers for the whistleblowers, said in an email they look forward to the case proceeding, and they appreciate the Delaware Department of Justice joining the case.
“This case involves serious questions of public health, human decency and issues that should be of concern to all taxpayers,” the lawyers said. “We look forward to litigation and our day in court and are pleased that the State of Delaware has joined the case.”
Lawyers for Centurion and Centene did not return a request for comment.
The ACLU of Delaware filed a separate class-action lawsuit in 2023 claiming the company’s health staff in state prisons routinely failed to treat illnesses, leading in some cases to prisoners’ deaths.
The ACLU further claimed the failures were a direct result of Centurion’s policies, which the advocacy group said amounted to “callous and deliberate indifference.”
Also named as defendants in the ACLU case are five Delaware Department of Correction officials along with Delaware’s new prison health care provider, VitalCore Health Strategies.
In December of 2023, Centurion’s attorneys argued in a motion to dismiss the class-action suit that the ACLU had “not plausibly alleged” the company had any such policies “of deliberate indifference toward inmates’ serious medical needs.”
Secret whistleblower complaint
In the fall of 2023, the whistleblower complaint against Centurion was quietly added to the court’s database, but was quickly sealed weeks after its appearance. For the better part of two years, it had sat under seal.
A spokesperson for the Delaware Department of Justice on Tuesday said a motion to unseal the case was approved by a judge earlier this year, after the case had been reviewed by its staff.
According to the spokesperson, the next step in the case will be discovery, where lawyers will likely battle for access to highly confidential and revealing information about Centurion’s business practices.
The lawsuit, which was filed back in August 2023 by two former Centurion employees, Jamie Basara and Deneen Rayne, challenges the prison healthcare provider under the Delaware False Claims and Reporting Act.
That statute 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.
A key part of their complaint targets the company’s “Road to Recovery” program, of which both former employees had at one point staffed. The program was aimed at helping inmates recover from addiction, the complaint said.
But when the whistleblowers worked in the program, they claimed it was understaffed, and inmates would receive credit for treatment they did not receive.
The complaint also said Centurion would submit “false and fraudulent” reports to the Delaware Department of Correction surrounding inmate attendance in its programming.
In its denial of the complaint, lawyers for Centurion and Centene argued the case is invalid because of the statute of limitations on such claims. Additionally, the healthcare provider firmly defended that all payments received were for services rendered to inmates.
“Defendents did not knowingly or recklessly present or cause to be presented any false or fraudulent claim for payment to the State of Delaware,” the response said.
The lawyers also claimed the company had no knowledge of any wrongdoing. They also skirted the allegations the provider denied patients care, citing a lack of access to medical records.
In their request for relief, the lawyers asked the judge to toss the case and require the whistleblowers to cover attorneys’ fees for the companies.
Embattled prison healthcare providers
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.
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 healthcare.
Claire DeMatteis, then-commissioner at the Delaware Department of Correction, told The News Journal 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 healthcare, 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 2023 announcement.
Five months later, VitalCore was named as a defendant alongside Centurion in the class-action lawsuit the ACLU filed on behalf of inmates.
In 2024, the DOC’s newest commissioner, Terra Taylor, said VitalCore is “doing well,” but added that the company has found it challenging to fill 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 at the time.
Karl Baker contributed to this report.
