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Centene : Ex-executive seeks to toss Medicaid suit extortion claims

01/26/2015 | 06:06pm US/Eastern

WICHITA, Kan. (AP) — A former executive who sued a firm managing part of the privatized Medicaid program in Kansas asked a judge Monday to toss out counterclaims accusing her of trying to extort $3 million, calling those claims a "not so thinly-veiled campaign of retaliation."

The latest legal dustup comes in the federal lawsuit filed against Sunflower State Health Plan Inc. and parent Centene Corporation by former Sunflower Vice President Jacqueline Leary. Her lawsuit, filed in October, contends she was wrongfully fired after protesting potentially improper cost-cutting moves for the Kansas Medicaid program.

Last month, the companies filed a counterclaim alleging Leary tried to extort the money from them by threatening to forward "spurious" information about them to state regulators after she was fired.

Leary asked U.S. District Judge John Lungstrum Monday to dismiss the companies' counterclaims, arguing their efforts to retaliate or intimidate her should not be allowed.

"Defendants' counterclaims are part of a not so thinly-veiled campaign of retaliation against Plaintiff for asserting her lawful rights to challenge the propriety of her employment," her attorney said in a legal filing.

At issue is a seven-page letter her attorney, Lewis Galloway, sent Centene in February 2014 in which he threatened to file a lawsuit on her behalf if the matter remained unresolved. The letter also stated Leary would make a formal complaint to the Kansas attorney general's office and state officials overseeing Medicaid, seeking sanctions.

Leary's attorney, Lewis Galloway, told The Associated Press Monday that he and his client have met with the Kansas attorney general's office and its Medicaid Fraud and Abuse Division regarding the companies' handling of the state's Medicaid program, and said it's likely his client would have moved forward with those complaints to state regulators regardless of any settlement in the lawsuit.

Galloway contends the letter he sent is an ordinary "offer of settlement" on an employment-related dispute. But Sunflower and its parent company have called the letter part of an "extortive scheme."

"Our position is easy to understand: Those claims are meritless and they are designed to intimidate my client," Galloway said.

An attorney for Sunflower and Centene referred any comment to a Centene spokeswoman, who did not immediately respond to an email.

The state's $3 billion-a-year Medicaid program, dubbed KanCare, covers health services for the poor and disabled. In 2012, Kansas turned the privatized program's administration over to Lenexa-based Sunflower and two other private health insurance companies.

Leary's lawsuit alleges she was fired after questioning a directive not to assign Medicaid participants to some physicians based on whether their institutions had contracts with Centene. Her lawsuit describes the move as an attempt to lower costs when the KanCare management companies were losing money, possibly violating its contracts with the state and with individual providers.

The companies countered that Leary didn't complain about the practice until after receiving a poor job performance evaluation.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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