Large donors to Landry paid millions to settle allegations of public health care overcharges

When Louisiana Attorney General Jeff Landry first took office in 2016, he emphasized his role in combating fraud in Medicaid, the government-backed health insurance program for people who are poor, pregnant or living with a disability.

Landry, now the Republican frontrunner in the governor’s race, highlighted the work of the state’s Medicaid Fraud Control Unit. It’s a team in his agency assembled to weed out health care providers who charge Medicaid inappropriately or abuse Medicaid recipients. 

During his first four years in office, Landry sent out 34 press releases announcing 145 arrests, eight convictions and two indictments over Medicaid fraud.

“Fraudulent claims to the Medicaid program will be investigated, and the scammers will be arrested,” Landry said in an April 2016 press release. “My office and I are committed to rooting out fraud wherever it exists.”

The attorney general’s commitment to stamping out Medicaid swindlers has not prevented him and his affiliated political action committees (PACs) from accepting hundreds of thousands of dollars in political donations from health care companies and their executives accused of committing health care fraud. At least two of  contributors are also top donors to Republican Liz Murrill, Landry’s current deputy who is running to replace him as attorney general.

None of the companies who donated have admitted to wrongdoing, but they’ve all agreed to pay out millions of dollars to avoid lawsuits over allegations they were overpaid by Medicaid or its sister program Medicare, a federally funded health insurance for seniors and people with disabilities. 

Landry’s campaign declined to comment for this story. Murrill’s campaign did not answer several requests through calls, emails and texts for comment. 

A quiet agreement

In November 2021, Landry signed a settlement agreement on behalf of the state totaling $64.2 million with Louisiana’s largest Medicaid insurance provider, Centene Corp, according to KFF Health News. It was one of several settlements the Missouri company struck with states over accusations it charged Medicaid programs too much for prescription drugs. 

But just two years earlier, in September 2019, Centene made a $25,000 donation to a Landry PAC, Louisiana Citizens for Job Creators, while he was running for reelection as attorney general.

Last month, Centene also gave a $100,000 contribution to the Republican Party of Louisiana, which is financially supporting Landry and Murrill’s campaigns. The donations came on top of a $100,000 in contributions Centene made to the Louisiana GOP back in 2019, when the party supported Landry’s reelection campaign for attorney general. 

KFF Health News also reports Centene — one of the largest Medicaid insurance providers in the country — has given money to the Republican Governors Association, which is running television attack ads opposing Democratic governor candidate Shawn Wilson. The company also donates to the Republican Attorney Generals Association, where Landry is a member of the leadership team.

Centene also gives across the political spectrum in the Louisiana Legislature, including to every member of Republican and Democratic legislative leadership. It also contributed to Democratic Gov. John Bel Edwards’ election efforts and political groups. 

In spite of the settlement’s size, no one in the state government, including Landry and Edwards, promoted the multimillion-dollar settlement with Centene when it was finalized. KFF Health News obtained a copy of it through a public records request.

The company, which operates locally as Louisiana Healthcare Connections, did not respond to a request for comment sent to its corporate headquarters outside St. Louis.

A prominent Acadiana employer

In 2011, LHC Group Inc. agreed to pay $65 million, plus 2.5% in interest, to the federal government and a whistleblower to close out claims that it billed Medicare, military-affiliated Tricare and other federal health care programs for services that allegedly weren’t medically necessary and provided to people who did not qualify for them. 

Acadiana businessman Keith Myers started LHC Group, one of the largest home health care providers in the country, in St. Landry Parish in the 1990s. It is now one of Louisiana’s most prominent employers with a staff of 29,000 nationally and a central office based in Lafayette, though it was recently sold to UnitedHealth, a Minnesota health care behemoth. 

Myers could not be reached for comment, but in press statements released at the time of the settlement, he emphasized the company was not admitting to guilt by settling the allegations against it.

Landry, as attorney general, also has no power to investigate fraud in Medicare — which is completely funded by the federal government — but providers who accept it often also treat Medicaid clients. In some cases, individuals can be insured by Medicare and Medicaid at the same time.

LHC Group, Myers and his wife Ginger have given Landry and his affiliated PACs over $600,000 since 2017. The money was split across Landry’s various campaigns ($37,500), Louisiana for Job Creators PAC ($394,536) and Cajun PAC II ($185,000).

Murrill’s campaign, with a donation cap of $5,000 for individuals and most other entities, has received $22,500 combined from LHC Group and the Myers.

Soon after the Republican Party of Louisiana gave Landry an early endorsement over his GOP opponents last fall, Myers and LHC Group donated $100,000 to its operations, according to campaign finance reports. 

A whistleblower initially brought the lawsuit that resulted in the settlement against LHC Group. Judy Master of Texas was a registered nurse employed by an auditing firm and working on the company’s financial records. She accused LHC of, among other things, altering information on patients’ bills so they would result in higher Medicaid payments, according to court records. For her role in the lawsuit, Master received $12 million from the overall settlement and LHC also agreed to pay her attorneys $1 million.

Landry drops case against LHC group

In a twist, Landry filed a lawsuit last year against UnitedHealth, the company that recently bought LHC Group. His action is similar to the lawsuit the state of Ohio brought against Centene that resulted in large state settlements. Landry alleges UnitedHealth has overcharged Louisiana’s Medicaid program for prescription drugs.

North Louisiana hospital owner

Another prolific group of donors to Landry, Allegiance Health Management and its executives, also agreed to a settlement with the federal government in order to scuttle allegations about overcharging Medicare. 

Allegiance Health Management, which owns rural hospitals and other health care companies across the southeastern U.S., agreed to pay $1.7 million to the federal government in 2018 to avoid a litigation alleging it overcharged Medicare for outpatient therapy services that were not needed or “medically reasonable.” 

At least 18 hospitals that partnered with Allegiance in providing the outpatient therapy in question also ended up settling with the federal government for over $20 million as a result of the same lawsuit. Some of the facilities involved, including ones in Many and Minden, are in Louisiana.

Based in the Shreveport area, Allegiance has denied any wrongdoing, and said it chose to settle its lawsuit to avoid running up legal bills and the burden of an ongoing federal investigation.

“State and federal regulatory programs routinely conduct thousands of audits and other program oversight activities every year which focus on participating healthcare providers,” wrote Michael Schulze, a Lafayette attorney representing the company, in an email last week. “AHM has a strong and recognized history of complying with all federal and state Medicare and Medicaid statutes and regulations.”

Landry has received $40,000 for his gubernatorial campaign and $25,000 for Cajun PAC II from Allegiance, its executives Rock Bordelon and Don Cameron, and their other businesses. The executives also gaven $55,000 to Murrill’s attorney general campaign.

The lawsuit was initially brought by a whistleblower, Ryan Ladner, who worked for one of Allegiance’s subsidiaries running an intensive outpatient therapy program in Hattiesburg, Mississippi.

In an initial complaint, Ladner described the services being provided as “bogus,” and said the company was billing Medicaid for patients to watch television and play games such as bingo instead of attending therapy. People were referred to Allegiance’s programs by local hospitals in Louisiana, Arkansas, Mississippi and other states.

It’s unclear to what extent a federal investigation verified Ladner’s account of the “bogus” therapy because many documents in the case are not available to the public. Schulze said Ladner mischaracterized most of the services. 

“The complaint is full of allegations that simply were not true and never happened,” Schulze said in an email.

Ladner received close to $5 million combined from the government’s settlements with hospitals and Allegiance Health Management. The negotiations were handled in the U.S. District Court of Eastern Arkansas, where Allegiance also operates. 

The company’s settlement came after most of those with hospitals and when Trump was already in office. Bordelon, the head of the company who lives in Northwest Louisiana, is friendly with Donald Trump Jr.

Trump Jr. has appeared on Bordelon’s reality show about hunting and is in several personal photos on Bordelon’s social media feeds. Based on a Facebook post, he appears to have attended Bordelon’s wife’s most recent birthday party. Bordelon also has photos on his Instagram account from Trump’s election night party in 2020, when he lost the race to President Joe Biden.

Christopher Thyer, a former U.S. attorney in Arkansas appointed by Trump, celebrated the settlement against Allegiance Health Management in 2018 as a victory over fraud for taxpayers. 

“This case demonstrates that the U.S. Attorney’s Office for the Eastern District of Arkansas will aggressively pursue civil health care fraud cases, where the integrity of the Medicare system has been undermined,” said Thyer in a press release at the time. .

Moving away from Medicaid criticism

During his first term in office, Landry often tried to tie health care fraud directly to the governor’s decision to expand Medicaid. He said the state needed to invest more resources in investigating Medicaid fraud because Edwards had added hundreds of thousands of people to the program.

”The rise in fraud throughout the Medicaid and Medicare systems has skyrocketed, and the Governor’s expansion will only perpetuate the problem in Louisiana,” Landry said in a 2018 press release. “Though Medicare is a strictly federal program, our office will continue to do all we can at the state level to go after fraudsters attempting to take advantage of programs intended to help our vulnerable.”

As Landry got closer to running for governor though, he dialed down the talk about Medicaid fraud. In his second term in office, which started in 2020, he hasn’t put out a single press release about arrests or convictions from his Medicaid fraud team’s work.

Landry has also recently told people privately and publicly that he won’t repeal Edwards’ Medicaid expansion order.