Texas House panel escalates inquiry into Medicaid insurer that investigated lawmakers

AUSTIN __ A Texas House committee on Thursday enlisted the state auditor’s help with an inquiry into a Medicaid insurer whose former CEO admitted hiring private investigators to dig into the personal lives of patients, providers and lawmakers.

The committee’s chairman, Southlake GOP Rep. Giovanni Capriglione, is also demanding that Superior HealthPlan immediately face billion-dollar repercussions for its actions.

According to letters sent to state officials Thursday and obtained by The Dallas Morning News, Capriglione – who chairs the House Committee on Delivery of Government Efficiency dedicated to rooting out waste, fraud and abuse in the system – is asking that Superior be removed from consideration for at least $1 billion in state Medicaid contracts that are under procurement.

The proposed sanctions come after Superior CEO Mark Sanders admitted to the company’s actions under questioning by the committee on March 26. The admission launched an investigation by the Texas Attorney General and an inquiry by the panel, both of which are still going on.

The admission also led to Sander’s termination by the company, which said at the time that it did not endorse the long-abandoned practice of hiring private investigators to collect data on the personal lives of lawmakers who oversee the state’s healthcare regulations. At least one North Texas lawmaker has filed legislation prohibiting the practice.

In a Thursday letter signed by the committee, lawmakers requested that Texas State Auditor Lisa Collier help them procure a host of financial and compliance information about Superior HealthPlan and its parent company, Centene Corporation.

That includes any evidence of irregularities or comingling of state funds with private revenues or contractors not previously disclosed, contract violations such as overbilling the state, information on whistleblower reports and compliance audits, and records of internal oversight and disciplinary actions – among a host of other items. The information would be used in the committee’s investigation into whether the company broke any laws in its actions or in state contracts.

Also on Thursday, Capriglione sent a letter to Texas Human Services Commissioner Cecile E. Young asking that the agency suspend Superior’s ability to take on new Medicaid members, prohibit new contracts from being awarded, and switch state foster kids who get Medicaid through the MCO to another insurer.

Superior’s conduct “exemplifies” why the committee was created in the first place, Capriglione wrote in the letter.

“More facts concerning Superior’s use of private investigators to spy on legislators and its own members undoubtedly will be uncovered in the coming weeks and months,” Capriglione wrote. “But Mr. Sanders’ testimony alone warrants HHSC taking immediate action with respect to Superior to protect Texas taxpayers, Medicaid enrollees, and the integrity of our state’s healthcare system.”

In a statement to The News, Capriglione called the actions by Superior “appalling” and said they “demand immediate attention.”

“Surveillance of vulnerable Medicaid patients and lawmakers is not just unethical; it’s a betrayal of public trust and an abuse of taxpayer dollars,” Capriglione said. “These letters make clear that this behavior cannot be tolerated in Texas. The state must act decisively to hold these corporations accountable and protect the integrity of our healthcare system.”

Centene officials, in a statement to The News, said they plan to respond directly to Capriglione, but that they respect the concerns raised in the letter and are “committed to accountability and cooperation.”

Officials hope to help the chairman and committee understand that the investigations did not involve physical surveillance or any investigators sent to Texas, the statement said.

They urged caution as state officials consider hindering their presence in the state, saying it could have unintended consequences to the company’s 1.7 million members in Texas.

“Disrupting Superior’s operations before the Attorney General’s review is complete could jeopardize care for vulnerable Texans, including foster children in the STAR Health program, and place thousands of jobs at risk.,” the statement reads. “We urge a thoughtful, measured approach that protects access to care while allowing the facts to speak for themselves.”

Private investigations

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.

“DOGE committee members raised serious questions about the intent behind these actions, including whether Superior sought to gain leverage over legislators to help secure Medicaid contracts,” Capriglione wrote in the letter. “It is not known at this time whether Superior informed State Legislators of embarrassing or compromising information the company’s investigators found on them.”

In March, DOGE lawmakers convened a hearing to question SuperiorHealth about that after receiving information on the investigations. Superior is among several MCOs in Texas – including three nonprofit plans run by children’s hospitals in the state – fighting a proposed $116 billion procurement that would reassign some 1.8 million impoverished Texans to new Medicaid healthcare insurance plans and shut down several nonprofit plans.

Superior, a for-profit national MCO and one of the state’s biggest providers of health insurance for children on Medicaid, stands to lose $900 million in that procurement – which is currently tangled up in the courts.

Sanders told lawmakers during the hearing 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.

“We’ve done what I would call general research,” Sanders told them. “Anything that’s publicly available.”

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

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.

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