Firm at center of Pa. Medicaid contract controversy to open $20M call center in Blair County

Michael Neidorff
Michael Neidorff is chairman and chief executive of Centene Corp., the company at the center of a controversy of new Medicaid managed care contracts in Pennsylvania.

Centene Corp., a St. Louis insurer at the center of a legal fight over long-delayed Medicaid managed-care contracts in Pennsylvania, plans to build a customer claims center in Blair County, Gov. Wolf announced Thursday. The facility is expected to employ nearly 300.

A unit of Centene, Pennsylvania Health & Wellness, was among the companies picked early last year to manage Medicaid benefits for physical health, valued at about $12 billion annually, but the final award of contracts has been delayed by a court fight over whether Centene received an improper boost when its representatives met privately with state officials shortly before the choices were announced.

Among the losers were Aetna and United Healthcare, and they have been trying in Commonwealth Court to have the award to Centene thrown out. The case is pending.

At a hearing in October, a Commonwealth Court judge compared the Dec. 2016 meeting between Centene representatives and officials from the Pennsylvania Department of Human Services to “an ex parte communication with the judge,” according to a transcript that does not identify the judge who spoke.

The purpose of the meeting with Centene was to get “assurances that they could fully perform,” Sallie Rodgers, a human services department attorney, told the panel of Commonwealth Court judges.

The Medicaid contract was put out to bid in September 2015, but had to be redone because of early irregularities in the procurement process.

Separately, Centene is among the companies that won contracts to manage long-term services and supports, such as nursing home stays. That program started in January in the Pittsburgh region and is coming to the Philadelphia region next January.

Wolf said Centene would purchase a 53,300-square-foot facility near Altoona, where Centene’s chairman and chief executive Michael F. Neidorff grew up, and invest $20 million in the claims center. The state Department of Community and Economic Development offered Centene a $900,000 Pennsylvania First grant and $592,000 in Job Creation Tax Credits.

“Centene’s Health Choices contract process and the company’s agreement with the Governor’s Action Team are not related,” Michael Gerber, a spokesman for the economic development department, said. “The incentives are based on the commitment being made by Centene to the Altoona community in job creation and investment, which will have a significant positive impact on Altoona’s workers, families, and its economy.”