Health Net, an American health care
insurance provider that Centene Corporation acquired in 2016 for $6.8 billion
has brought legal trouble to its parent company yet once again. A fresh lawsuit
(https://bit.ly/3bgs8Yw)
has been filed in the US District Courts against Health Net, Centene and its
CEO Michael Neidorff, and several others alleging racketeering and a conspiracy
that drove a whistleblower, Sovereign Health Group, out of business in 2018
just to keep the irregularities in Centene’s Health Net acquisition away from
scrutiny.
Health Net, which provides health
benefits to approximately 5.9 million individuals in all 50 states and the
District of Columbia through group, individual, Medicare, Medicaid, Tricare,
and Veterans Affairs programs, was acquired by Centene in 2016 despite
criticism by many of its investors. There have been allegations and lawsuits in
the past as well that hinted upon wrongdoings in the deal, which were settled
by Centene out of court.
The new lawsuit brings the irregularities
in the acquisition to the limelight yet once again. This development does call
for a deeper scrutiny of the lies that were sold to the investors and shareholders
by Centene’s CEO to get necessary approvals for the acquisition from its Board.
The new lawsuit gives rise to speculation
that there was definitely something very fishy that happened in the Health
Net’s acquisition by Centene Corporation and those involved went to great
lengths to keep things under wraps.
It is pertinent to remind here that
Michael Neidorff made a windfall and earned a huge amount in cash and stocks as
his performance bonus after Centene’s acquisition of HealthNet. Michael
Neidorff is said to have sold $20 million worth of his stock soon after and he
was the one person who had all information about the deal including everything
shady that’s been alleged time and again and which Centene has tried to settle
out of court each of the time.
If at all the allegations in the new
lawsuit by Sovereign are true, they add a new dimension to the Health Net
acquisition story and bring to light the web of lies that was spun by Michael
Neidorff and his team to get the deal approved by Centene’s Board of Directors.
Even the Board of Directors will have to
answer a lot of questions if the allegations in the new lawsuit are found to be
true as the members of the board must have benefited from the deal as well
while they all looked away from all that was wrong with the deal and not
calling for a greater scrutiny of the same.
However, if the allegations made in the
new lawsuit do stick, the worst hit will be the shareholders of Centene
Corporation and those who have bought health insurance from Health Net or any
other subsidiary of the company. The innocent shareholders stand to lose their
investments and Centene’s customers stand to lose their health cover if the
company were to go under.
Unless, of course, another out of court
settlement is made by Centene. But even then, it will be a case of “not right
now,” and the question of “how long before it does happen” that will keep
lingering on. It seems like white collar crime and corruption are eating into
the soul of American markets and the small investors are being taken for a huge
ride once again!