Centene slapped with lawsuit over provider networks in ACA exchange plans

gavel and books
A newly filed lawsuit claims that Centene misrepresents which providers its ACA exchange policyholders can access in-network. (Image: Pixabay)

Centene, an insurer that has thrived on the Affordable Care Act exchanges, is facing a federal lawsuit alleging its plans fail to provide adequate access to in-network providers.

The class-action lawsuit was filed Thursday in the U.S. District Court for the Eastern District of Washington on behalf of Centene customers who are enrolled in the company’s “Ambetter” plans through the individual insurance marketplaces.

The lawsuit accuses Centene of "selling junk plans on state exchanges and misleading enrollees about the plan benefits," which violates the ACA's requirements that plans provide adequate coverage, according to a release from the law firms representing the plaintiffs. Indeed, the complaint says that Ambetter policyholders around the nation report “strikingly similar” problems when trying to use their health coverage.  

“After purchasing an Ambetter insurance plan, they learn that the provider network Centene represented was available to Ambetter policyholders was in material measure, if not largely, fictitious,” the complaint states. In some instances, it said, the insurer listed nurses and even medical students as in-network primary care providers.

The suit also alleges that Centene often fails to reimburse providers’ legitimate claims, which further reduces its provider network by leading “a large number” of providers to reject Ambetter insurance. 

For Centene's part, a spokeswoman said in an email to FierceHealthcare that the company has not yet been served with the lawsuit.

“However, we take these matters very seriously,” she wrote. “We believe our networks are adequate. We work in partnership with our states to ensure our networks are adequate and our members have access to high quality healthcare.”

Washington state had already taken administrative action against Centene for issues with its provider networks. Citing numerous complaints from consumers, state regulators ordered Centene to stop selling individual market plans as of Dec. 12. Centene was allowed to resume selling ACA plans less than a week later after it agreed to fix the issues and pay a $1.5 million fine.

Unlike other major publicly traded insurers, which have largely pulled back from the ACA exchanges, Centene took a bullish approach and expanded into new regions in 2018. This week, CEO Michael Neidorff said the insurer had enrolled more than 1.4 million people in marketplace plans as of Jan. 7—an increase of more than 400,000 compared to the third quarter of 2017, according to Reuters. Previously, Neidorff attributed the company's third-quarter revenue increase to the growth of its marketplace business. 

Centene is also the nation’s largest Medicaid managed care plan, according to PwC. And it’s about to get even larger, as Centene announced a deal in September to acquire New York-based Fidelis Care for $3.75 billion.