Now-defunct Sovereign Health says the defendants schemed to deny payments so they could recoup $390 million Centene lost when it purchased Health Net.
Sovereign Health has filed a $1.125 billion RICO lawsuit against Centene Corp., Health Net, and their attorneys, alleging that the defendants schemed to deny payments owed to the now-defunct San Clemente, CA-based mental health and addiction services provider.
In documents filed in a U.S. District Court in Los Angeles, Sovereign alleges that the defendants, including Centene CEO Michael Neidorff, and their attorneys at Manatt, Phelps & Phillips colluded to reneg on claims as part of a strategy to recoup $390 million in liabilities that were not properly disclosed when Centene acquired Health Net for $6.3 billion in March 2016.
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The 30-page suit alleges that the defendants "engaged in practices that are in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO); Conspiracy to Violate RICO; Intentional Interference with Prospective Economic Advantage, Violation of Unfair Competition Law; and Slander."
Sovereign, which operated nine mental health and substance abuse treatment centers in California and four other states before shuttering in July 2018, is seeking $625 million in damages, plus interest accrued, and $500 million in punitive damages.
St. Louis-based Centene and Woodland Hills, CA-based Health Net did not respond to requests for comment. HealthLeaders' was unable to locate a spokesperson for Manatt, Phelps & Phillips.
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John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
Photo credit: KIEV, UKRAINE - Dec 11, 2018: Centene Corporation Insurance company logo seen displayed on smart phone. - Image / Editorial credit: IgorGolovniov / Shutterstock.com
KEY TAKEAWAYS
Sovereign, which operated nine mental health and substance abuse treatment centers in California and four other states before shuttering in July 2018, is seeking $625 million in damages, plus interest accrued, and $500 million in punitive damages.
The 30-page suit alleges that the defendants "engaged in practices that are in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO); Conspiracy to Violate RICO; Intentional Interference with Prospective Economic Advantage, Violation of Unfair Competition Law; and Slander."