Former vice president of KanCare company sues for wrongful termination over possible fraud concerns

A lawsuit filed this week by the former vice president of one of the companies providing KanCare services alleges that she was wrongfully terminated for raising concerns about possible fraud on the company’s part.

The suit, filed Oct. 27, names St. Louis-based Centene Corp. and its subsidiary, the Sunflower State Health Plan, as defendants. Sunflower is one of three companies that was awarded a contract when the state privatized Medicaid in 2013.

Jacqueline Leary, Sunflower’s former vice president of contracting and network development, alleges that she was wrongfully terminated when she reported possible wrongdoing to the company’s compliance office.

Leary said Rob Hitchcock, Centene’s executive vice president, instructed her to close down primary care services at the University of Kansas Medical Center in February 2013 because KU Med had contracted for a higher reimbursement rate, according to the complaint.

Then in July 2013, she was instructed by Jean Wilms, Sunflower’s CEO, to move KanCare patients receiving services from health care providers with higher rates to ones that charged the state’s standard Medicaid rate as a way of boosting the company’s finances, the complaint alleges.

When she resisted and asked how she could explain this move, Leary was told to lie to KanCare recipients, the complaint alleges.

Leary received a poor performance evaluation as a result and brought the matter to the company’s compliance officer in January 2014, the complaint states.

Leary informed the compliance officer “that she believed that the practice was contrary to both SSHP’s contract with the State of Kansas and SSHP’s contracts with its providers” and “explained also that she believed in good faith that the practice violated both the Centene Business Ethics and Conduct Policy and state or federal law, including federal anti-fraud statutes and/or federal law relating to fraud against shareholders.”

Leary said the compliance officer said she would investigate and that Leary would be protected, but when she asked about the status of the investigation 11 days later, she was informed that no progress had been made. Wilms terminated Leary’s employment later that afternoon.

“The United States and the State of Kansas have recognized clear mandates of public policies against the perpetration of fraud in connection with the delivery of or payment for health care benefits, including those provided as part of the federal Medicaid program,” according to the complaint written by Leary’s attorney Lewis Galloway.

Centene and its agents “knew that Plaintiff engaged in a protected activity or conduct by opposing the unlawful directives of Defendants Jean Wilms and Rob Hitchcock and by making a formal complaint … which she believed in good faith violated both the Centene Business Ethics and Conduct Policy and state or federal law, including federal anti-fraud statutes and/or federal law relating to fraud against shareholders.”

A footnote in the suit states that Centene conducted an internal investigation that “confirmed that primary care physicians within four separate provider groups were removed from the auto-assignment process: (1) University of Kansas Medical Center; (2) Stormont-Vail HealthCare; (3) Saint Luke’s Health System; and (4) Via Christi Health.”

Wichita-based Via Christi is the largest provider of health care services in the state.

The privatization of Medicaid, the program that provides insurance to low-income people and those with disabilities, was one of Gov. Sam Brownback’s major policy accomplishments. None of the three KanCare companies turned a profit in the program’s first year of existence and all three missed several performance benchmarks.

KanCare has also been at the center of reports about an FBI investigation into influence peddling at the Capitol.

Representatives for Centene and Sunflower did not respond to requests for comment Tuesday afternoon.

Eileen Hawley, the governor’s communications director, called the lawsuit “a personnel issue between this individual and Centene.”

“We have no information about the lawsuit and will not engage in speculation,” she said.

Democrat Paul Davis, who held a campaign rally outside the Capitol on Tuesday evening, said the suit contained “very, very disturbing allegations” and said he would have “an instant top-to-bottom review.”

“There seems to be this increasing cloud around the KanCare program and the people who are involved in this,” said Davis, who faces Brownback in the Nov. 4 election. “Obviously, this lawsuit is going to need to run its course, but when I’m elected we are going to have an instant top-to-bottom review because I’m concerned about a lot of things that are involved with KanCare.”

Leary previously filed a complaint with the U.S. Department of Labor’s Occupational Safety and Health Administration, according to documents obtained by The Eagle.

OSHA dismissed her complaint on Sept. 11, saying that the company had provided satisfactory evidence that Leary’s dismissal resulted from issues unrelated to what she had raised with the company’s compliance officer.

“Witnesses described, for example, Complainant’s difficulty with completing assignments in a timely and acceptable manner and in resolving issues for internal and external stakeholders, both of which prompted complaints about SSHP and Complainant’s overall performance,” states the September letter from Marcia Drumm, OSHA’s acting regional administrator in the agency’s Kansas City office.

This story was originally published October 28, 2014 at 4:32 PM with the headline "Former vice president of KanCare company sues for wrongful termination over possible fraud concerns."