Insurance company CEO fired after Texas House DOGE hearing

AUSTIN — The chief executive of a private health insurance company who admitted in a legislative hearing Wednesday to hiring private investigators to spy on customers has been fired.

The dismissal of Superior HealthPlan CEO Mark Sanders follows his testimony Wednesday to the Texas House Delivery of Government Efficiency Committee in a hearing on Medicaid procurement, during which he acknowledged hiring private investigators to get background information on lawmakers and others.

"The conduct highlighted yesterday during the course of the Texas House Committee hearing is not reflective of our values nor is it a practice Centene's current leadership condones," Centene, Superior's parent company, said in a statement to The Dallas Morning News. "To this end, Mark Sanders is no longer with our organization."

Sanders' termination comes hours after Texas Attorney General Ken Paxton announced he was investigating the company over the allegations aired inside the Capitol on Wednesday.

"The allegations concerning Superior's actions, such as actions that were characterized as potentially blackmailing lawmakers to secure state contracts and surveilling private citizens to avoid paying legitimate claims, are deeply troubling," Paxton said in a statement. "I will get to the bottom of this, uncover any illegal activity, and hold bad actors responsible."

At the center of the probe is a series of private investigations, starting in 2017 and allegedly ordered by Sanders, who had just taken the helm as chief executive officer of Superior. The health care firm was facing lawsuits at the time over declining coverage.

Sanders, who headed one of the state's biggest providers of health insurance for children on Medicaid, told lawmakers under questioning Wednesday that investigators had done "routine" background checks into several state representatives, senators, health care providers, patients and their families, and a journalist several years ago.

The company has abandoned that practice, Sanders told the committee during a tense hearing he acknowledged was "rough" for him.

"We've done what I would call general research," Sanders said. "Anything that's publicly available."

Centene said it regretted the impact Sanders' conduct has had on the company's partners.

"Superior's credibility rests on being a trusted partner to our members, government stakeholders and providers," Centene said. "While we took the necessary steps to ensure this conduct was stopped a number of years ago, yesterday's hearing made clear we failed to address its full impact."

"We are committed to building transparent and trusted relationships with our government partners and remain focused on our mission to improve the health and well-being of the Texas communities we serve," the statement added.

The subjects of those investigations included Texas Land Commissioner Dawn Buckingham, then a state senator, and Southlake Republican state Rep. Giovanni Capriglione, according to documents obtained by The Dallas Morning News.

"You've hired private investigators to look at not only but also people who have filed claims and felt that they deserved those claims but that you felt that they didn't," Capriglione, chairman of the DOGE committee, said at Wednesday's hearing.

"You were doing that for what purpose?" he asked. "Why would you go and run a background check, hire a private investigator to follow, to dig into the records of people who are your customers?"

In an interview Thursday, Capriglione said while it was good Sanders is no longer with the company, Paxton's investigation should proceed.

"When this happens, it's a culture within the company," he said. "This company is likely to have known about his actions before yesterday, and I think that has to be investigated as well."

House bills have been filed to prevent this issue from happening again, Capriglione said.

"We have legislation that will make sure that these government contracts have even more transparency and accountability, that we prevent anybody who uses these funds to go after private citizens, to go after state employees or anyone else," he said. "If any company does something like this again, they will never get a government contract again."

Investigators from the Griffin Personnel Group, a Missouri-based firm that specializes in employment verification, background checks and contract security services, also attempted to obtain the divorce records of Sen. Charles Schwertner, R-Georgetown, just a few months after his wife filed in early 2019, according to the documents.

The lawmakers at the time were members of budget-writing committees in their respective chambers.

The background checks took place over a period of time in which Centene was facing a lawsuit after a series of stories by The News reporter J. David McSwane in 2018.

The award-winning series revealed a pattern by health care companies, including Superior, of denying or stalling taxpayer-funded medications and treatments to critically ill and suffering patients while making billions in profits, according to the documents, which include emails between Sanders and the personnel firm, photographs and investigative reports from 2017 to 2019.

McSwane, patients and health care providers in the articles were subjected to background checks ordered by Superior, with reports that included photos of houses and credit checks.

"I don't think what any of us expected was for a health insurance company that is funded mostly by Texas taxpayer dollars, that they would use some of those monies to hire private investigators to follow a mom whose child was being denied medical care," Capriglione told Sanders during the hearing. "But it didn't stop there."

The revelations came as lawmakers from the DOGE Committee — tasked with rooting out waste, fraud and abuse of state tax dollars — questioned him and other health care executives about ongoing battles over hundreds of billions of dollars in Medicaid contracts.

Superior was one of the biggest losers in a proposed $116 billion Medicaid contract procurement overhaul announced a year ago. The company is among several health care providers that have sued, saying the state didn't follow the law when it proposed shuffling the coverage of some 1.8 million low-income Texans — mostly poor women and children — by dumping or reducing the involvement of several long-time managed-care organizations in the program.

Superior, a for-profit national company, stands to lose up to $900 billion in contracts over the next dozen years, but the proposal — backed by state health executives but tangled up in the courts for now — also would have dropped three legacy insurance programs run by nonprofit children's hospitals.

Before the hearing, Capriglione distributed a slim folder with the report that had been gathered on him and emails from Sanders to the firm in 2017 ordering a "rush" on his report, lawmakers said.

Capriglione and other lawmakers demanded to know why the checks had been ordered and threatened investigations into the motivation and purpose of those checks.

Rep. Tony Tinderholt, R-Arlington, suggested Sanders hired private investigators to get leverage on lawmakers.

"It could be illegal. I don't know," Tinderholt said. "I would ask the attorney general to potentially investigate your actions on whether they were legal and whether you tried to use what you found out during those investigations against these people in order to gain billion-dollar contracts."

Rep. Ellen Troxclair, R-Lakeway, said it was "insane" that a state legislative committee, in a hearing that had been called for them to learn more about Medicaid, had to instead focus its attention on whether Sanders' company had read lawmakers' divorce records.

"When are you going to tell us that you're going to do better, that you're going to change?" she asked. "Instead, you come here and you complain that you didn't get a procurement? What kind of grand miscalculation was that?"

"I—I don't have a response there," Sanders told her.