Texas Attorney General Ken Paxton announced Thursday that he has launched an investigation into one of the state’s Medicaid insurance providers after allegations that the company illegally spied on Texans.

What You Need To Know

  • The state is investigating Superior HealthPlan for allegedly using private investigators to perform surveillance and gather potentially confidential information on lawmakers, journalists and other Texans

  • Superior HealthPlan CEO Mark Sanders was questioned Wednesday by members of the Texas House Committee on the Delivery of Government Efficiency about his company’s use of private investigators

  • On Thursday, Superior HealthPlan fired Sanders, the Dallas Morning News reported

  • At Wednesday’s hearing, Sanders defended his company’s actions by saying that the information gathered was nothing beyond what was publicly available

The state is investigating insurance company Superior HealthPlan for allegedly using private investigators to perform surveillance and gather potentially confidential information on lawmakers, journalists and other Texans. Superior HealthPlan provides Medicaid coverage to adults and children, as well as coverage for the Children’s Health Insurance Program in Texas.

“The allegations concerning Superior’s actions, such as actions that were characterized as potentially blackmailing lawmakers to secure state contracts and surveilling private citizens to avoid paying legitimate claims, are deeply troubling,” Paxton said in a statement.

Superior HealthPlan CEO Mark Sanders was questioned Wednesday by members of the Texas House Committee on the Delivery of Government Efficiency about his company’s use of private investigators. The topic surfaced as lawmakers questioned company representatives about potential fraud and waste of taxpayer funds connected to its Medicaid contracts. Sanders told the committee members that the company used private investigators in the past, but hasn’t done so for the past few years.

On Thursday, Superior HealthPlan fired Sanders, the Dallas Morning News reported.

At Wednesday’s hearing, Sanders defended his company’s actions at the hearing by saying that the information gathered was nothing beyond what was publicly available.

“It was just understanding (what interests people), so we could have been knowledgeable of when we’re meeting with different individuals. That’s really it,” Sanders replied.

Lawmakers expressed concern that the actions aimed to secure leverage to help the company win future state contracts, discredit legitimate insurance claims by individuals, and track journalists' reporting on allegations against Superior HealthPlan.

“I disagree. You wanted leverage, and you felt that you were going to use it. Just disgusting,” said state Rep. Tony Tinderholt, R-Arlington.

State Rep. David Cook, R-Mansfield, asked Sanders that if there was no intent to gain leverage over people, why did private investigators working for Superior HealthPlan look into legislators’ divorce records?

“I don’t recall at the time,” Sanders told lawmakers.

House Bill 5061, filed by state Rep. Jeff Leach, R-Plano, earlier this month, addresses some of the lawmaker’s concerns by prohibiting any contractor that works with the state from engaging in surveillance.

“We’re up here talking to a company who has received millions, billions of dollars in taxpayer funds through Medicaid contracts, who has used that money to hire private investigators to follow around patients and legislators that are (now) asking questions about what the heck is going on,” said state Rep. Ellen Troxclair, R-Lakeway. “It’s ridiculous.”

Tiffany Young, spokesperson for Texas Health and Human Services, referred questions on how the investigation could affect Texans’ Medicaid coverage to Paxton’s office. The attorney general’s office didn’t immediately respond to a request for comment Thursday afternoon.

This story was originally published by The Texas Tribune and distributed through a partnership with The Associated Press.