From Spotlight Delaware: Whistleblowers sue Covid-era prison health provider

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Centurion, the former health care provider for state prisons like Howard R. Young Correctional Institution in Wilmington, seen here, is facing a fraud lawsuit from whistleblowers. (SPOTLIGHT DELAWARE PHOTO BY JACOB OWENS)
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By Karl Baker, Senior reporter

This story was produced by Spotlight Delaware, a community-powered, collaborative, nonprofit newsroom covering the First State. Learn more at spotlightdelaware.org

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. 

The state’s Department of Correction chose to replace Centurion as its healthcare operator for several prisons last year after only a three-year term in which it was paid more than $150 million by the state. In May, the department announced that it was moving its contract to Kansas-based VitalCore Health Strategies. 

While details of the suit and of a parallel investigation by Delaware Attorney General Kathy Jennings are not publicly known, the actions appear to add to the mountain of legal scrutiny for the healthcare operations of what previously was Centurion’s parent company, Centene Corp.

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Centene, a $40 billion healthcare 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’ healthcare 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 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.

Centene and Centurion did not respond to requests to comment for this story.  A spokesman for the Delaware Department of Correction said the agency cannot comment on or confirm the existence of any litigation that remains sealed from the public.  

“The Delaware Department of Correction is committed to providing excellent medical and behavioral health care for the individuals in our custody and under our supervision,” said the spokesman, Jason Miller. 

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