SCOTUS ALERT!  THE CASE OF HEALTH AND HOSPITAL CORPORATION OF MARION COUNTY v. TALEVSKI IS BEING HEARD BY THE SUPREME COURT TODAY

By:

Dave Kingsley

Today the Supreme Court is hearing Health & Hospital Corporation of Marion County v. Talevski.  If the S.C. overturns the 7th Circuit decision in this case, it will not be merely “earth shaking” for nursing home patients, it will be an 8.0 earthquake followed by a tsunami for all Medicaid beneficiaries. For decades, the court has upheld the right of beneficiaries of Social Security programs whose rights are violated by states to seek redress through the federal courts.  Overturning this body of law has grave implications for beneficiaries of such programs as Aid to Families with Dependent Children (AFDC, replaced by Temporary Aid to Needy Families or TANF), Medicaid/Medicare funded long-term and skilled nursing care, and the Children’s Health Insurance Program (CHIP).

In addition to the derogation of human and civil rights resulting from an S.C. reversal of a body of law upholding rights such as those delineated in Federal Nursing Home Reform Act (FNHRA), the dimension of this case of major concern to me is the enhancement of states’ rights and corporate power in federally funded health and welfare programs.  The nursing home industry and major corporations such as The Ensign Group, UnitedHealth Group, Molina, Centene, Anthem, and Aetna/CVS violate regulations with impunity now – imagine how they will ride roughshod over states and beneficiaries if the 7th Circuit decision goes down.

The facts of Talevski v. HHC involve an elderly dementia patient by the name of Gorgi Talevski who was managed with psychotropic drugs and transferred from a facility in violation of FNHRA requirements.  Although the family fought the psychotropic constraints and transfer through state and CMS procedures and guidelines, they were frustrated by agency inaction and lack of relief.  The facility, HHC of Marion County, is part of a chain of facilities owned by the State of Indiana.

Ivanka Talevski, Mr. Talevski’s wife filed a suit in federal court (their daughter Susie is the attorney in the case).  The district court held that federal programs legislated in accordance with Congress spending powers do not provide for beneficiaries’ relief in federal courts and dismissed the action.  On appeal, the 7th Circuit reversed the district court’s decision and found in favor of Mr. Talevski.

The specific question in this case is whether patients whose FNHRA rights are violated can seek redress through the federal courts or whether their only recourse is appeal to state and federal agencies and/or through a personal liability suit. The 7th Circuit, citing precedence, decided that patients can sue a state in federal court when they incur clear violations of their FNHRA rights and reversed and remanded the case back to the district court.

It is likely that the six-member majority of extremist ideologues on the Supreme Court will overturn the opinion of the7th Circuit – a relatively conservative court with 7 members appointed by Republican presidents and 3 appointed by Democratic Party Presidents. The ideology and decisions of the S.C. conservative majority have been synchronized with the Republican Party and the reactionary conservatives now dominating the party.  Extremist conservatives have been in a decades-long crusade to dismantle the administrative state.  Their intention is to loosen all restraints on corporate behavior.

*6 F. 4th 7713 – Court of Appeals, 7th Circuit 2021.  Can be accessed at: https://scholar.google.com/scholar_case?case=10683715986232030526&q=talevski+v+health+and+hospital+corporation+of+marion+county&hl=en&as_sdt=6,26.  See also: https://www.scotusblog.com/case-files/cases/health-and-hospital-corporation-of-marion-county-indiana-v-talevski/; https://www.brennancenter.org/our-work/research-reports/supreme-court-shadow-docket

CENTENE CORPORATION, AMERICA’S 26TH LARGEST CORPORATION AND A MEDICAID CONTRACTING FIRM, REPORTS STRONG 3RD QUARTER EARNINGS

By:

Dave Kingsley

Centene Corporation’s Business & 3rd Quarter Results

Centene Corporation contracts with states to manage Medicaid programs.  Two-thirds of the company’s revenue flows from means-tested, welfare, programs.  The other one-third of its revenue is derived from Medicare, Tri-Care, and their prison contracting subsidiary Centurion.  Basically, the bulk of this corporation’s business is poverty medicine. 

Centene purchased a non-profit organization in the 1990s and took it private.  In 2001, the company issued an IPO.  In a mere two decades, Centene increased its revenue to $111 billion (2021 revenue).  In 2021, Fortune magazine placed it at 24th in the “Fortune 500.”  Ahead of Centene was Anthem at 23rd with revenues of $122 billion, at 22nd was General Motors with revenue of $122.5 billion. As an illustration of the rapid growth of this poverty-medicine company, in 2018, it was ranked 63rd in the “Fortune 500,” with revenue of $48.6 billion.

Centene’s 3rd quarter revenue of $35.9 billion was a 11% increase over their 2021 3rd quarter revenue of $32.4 billion.  The company is on track to increase its 2022 revenue to $135 billion.  According to the 3rd quarter report, “The increase was driven by organic Medicaid growth, primarily due to the ongoing suspension of eligibility redetermination, 22% membership growth in the Medicare business, and [our] acquisition of Magellan Health, Inc. (Magellan), partially offset by the PANTHERx divestiture.”

Centene is predicting (called guidance in finance lingo) an increase in 2022 earnings per share of $5.65 to $5.75.  The company’s stock which is trading above $81 per share as I write this, has been outperforming the DOW & S&P since the equities market moved lower at a rapid rate in late November of 2021.  On November 29, 2021, Centene closed at $73.77 and has been incrementally moving up while the overall market has been moving down.

Executives, Board Members, & Shareholders

The recently retired Centene CEO/Chairman John Neidorff is one of the highest paid corporate executives in the United States.  Over the past 3 years his compensation has totaled $72,033,192.  He owns 1.5% of 560 million outstanding shares of Centene stock – today worth over $80 per share.  Hence, his wealth in stock alone is worth approximately $680 million.

Sarah London – Neidorff replacement as CEO – earned $15 million in 2021 before her promotion to CEO.  The eleven 2021 board members earned from $335,000 to $426,000.  In 2021, two powerful former congressmen on the board, Richard Gephardt and Tommy Thompson, were paid $426,923 and $403,046 respectively. 

An activist investor (Quinten Koffey of Politan Capital Management) acquired 2 percent of the stock and made a successful move to oust Neidorff.  London, his successor, was most likely in on the move.  The board has been restructured as part of the company’s long-term plan to improve its profit margin (https://www.healthcaredive.com/news/neidorff-retire-centene-activist-investor-board-shakeup/611465/).