Centene cancels Charlotte HQ plans amid lawsuits and remote work trend
The Centene Corporation, a provider of managed health care services, has backed out of plans to move its east coast regional headquarters to Charlotte. Centene is a $35 billion company, and its $1 billion Charlotte campus was nearly complete after a year of construction.
This announcement comes as Centene settled this week with the state of Washington over a lawsuit that alleges the company overcharged the state’s Medicaid system for management services. In the settlement, Centene will pay $19 million to the state’s Medicaid Fraud Account, plus $13 million to the federal government. Centene also settled a similar lawsuit with New Mexico in June, agreeing to pay the state $13.9 million. Centene ended up settling with Ohio for $88.3 million and Mississippi $55 million dollars. The two states are among ten that received settlements from Centene, after suing the company primarily for overcharging and mismanagement of pharmacy benefits.
The company has also reportedly reserved $1.1 billion for any future settlements with other states. The company denies any liability and says the settlement does not indicate an admission of fault in the accusations.
In 2020, North Carolina’s Department of Commerce struck a deal with Centene, pulling $338 million in tax incentives through an add-on to the state’s Job Development and Investment Grant (JDIG). JDIG was originally designed to bring companies to poorer areas of the state, but Centene was awarded the first “transformational” JDIG grant to build its hub in urban Charlotte. Shortly after, Apple received a similar grant to build in the Triangle.
Originally, Centene promised to bring more than 6,000 high-paying jobs for Charlotte over the next 12 years, but that promise was later downgraded to 3,200 jobs.
For Gov. Roy Cooper the loss is not just of a big employer, but also a big corporate ally in Medicaid expansion. In 2021, Cooper and his Department of Commerce took a victory lap over landing the Centene headquarters, touting the extensive work that state employees dedicated to the deal.
“Looking around here, it’s amazing what $1 billion can do,” Cooper told the audience gathered at that dedication, referring to the estimated value of the 80-acre campus.
Centene and its CEO Michael Neidorff were part of the Cooper’s effort to drive a corporate push to expand Medicaid, one of Centene’s primary markets. In the 2021 ceremony, Cooper reinforced his and Centene’s position.
“Another thing Michael would tell you: We need to expand Medicaid. We need to make sure that this works,” Cooper said. “It’s a lay-up, folks. We need everyone out there talking to legislators about this critical moment in time. It’s really a moral issue for a person to be able to afford to see a doctor, and it’s time for that to happen.”
Despite the N.C. Senate and N.C. House each passing their own version of a step toward Medicaid expansion in the last legislative session, the bills did not pass the opposite chamber and never made it to Cooper’s desk. Legislative leadership says they are optimistic about reaching a deal later this year, but call for reforms to the state’s Certificate of Need laws to make it happen.
Centene says the reason they’re abandoning the campus and the east coast headquarters plan is the shift to remote work.
“Since announcing our plans to establish an East Coast headquarters in Charlotte, North Carolina, there has been a fundamental shift in the way people want to work,” a statement from Centene read. “Today, almost 90% of our workforce is working fully remote or in a hybrid work environment, and workplace flexibility is essential to attracting and retaining our top talent.”
Centene’s Charlotte facility broke ground a year ago in University Research Park along Governor Hunt Road. It was slated to include everything from office space to a child care center and an amphitheater. Centene says that its current 1,700 N.C.-based employees will remain here, plus the company plans to add 200 more positions that are a hybrid remote work model.