Texas Health Insurer Under Investigation for Alleged Spying on Lawmakers
AUSTIN (KXAN) – Superior HealthPlan, a health insurance company managing care for sick and disabled children in Texas, is facing scrutiny following accusations of spying on state lawmakers and private citizens. Texas Attorney General Ken Paxton announced an investigation into the company on Thursday, just one day after a contentious public hearing at the state Capitol.
Lawmakers on the House Committee on Delivery of Government Efficiency (DOGE) questioned the company’s CEO about surveillance practices they believe crossed ethical boundaries.
During Wednesday’s hearing, Committee Chairman Rep. Giovanni Capriglione, R-Southlake, revealed emails suggesting Superior HealthPlan hired private investigators to gather information on lawmakers and customers.
“I don’t think what any of us expected was for a health insurance company that is funded mostly by Texas taxpayer dollars, that they would use some of those monies to hire private investigators, that they would hire a private investigator to follow a mom whose child was being denied medical care,” Capriglione said, referencing the emails.
‘Appalled and Disgusted’
KXAN investigators have been working for months to verify and contextualize copies of similar emails. These emails showed communications between Superior CEO Mark Sanders and a personnel group known for conducting background investigations. The emails, dating back to 2017 and 2019, revealed Sanders requesting “in depth” reports on certain lawmakers and healthcare providers.
“Mr. Sanders, have you ever tasked a private investigator firm to dig into the background and financial or personal records of any state government official or their wife?” Capriglione asked during the hearing.
Sanders replied, “I have… We’ve done what I would call general research, anything that’s publicly available.”
“Why would you go and and run a background check, hire a private investigator to follow, to to dig into the records of people who are your customers?” Capriglione questioned.
Sanders responded, “First of all, I will say we no longer use that practice, and haven’t for several years.” He added, “At the time, we really just wanted to have information on those individuals, and really nothing beyond that of what was publicly available to us.”
KXAN reached out to Superior HealthPlan several times for comment but did not receive a response. Lawmakers mentioned in the emails also declined to comment until the committee hearing.
“There was a time when I asked a lot of questions,” Capriglione said, “and I didn’t know that you could be penalized for asking questions — for trying to find out for the taxpayers and the constituents how their money was being spent.”
Rep. Tony Tinderholt, R-Arlington, stated he was “appalled and disgusted” upon reviewing the emails.
“It’s emails with your name on it, and you investigated people that are on this dais for doing their job for Texans. What do you have to say for that?” Tinderholt asked.
Sanders replied, “I think going back in time, I think it was just understanding what interests and information we could have knowledgeable of — be knowledgeable of when we’re meeting with different individuals.”
Tinderholt responded, “I disagree. You wanted leverage and you thought that you were going to use it.” He and other lawmakers expressed concern that the company sought leverage to gain future state contracts or to discredit customers seeking legitimate insurance claims.
Medicaid and Managed Care in Texas
Superior HealthPlan is one of several private companies that operate Texas’ Medicaid programs under a “managed care” system. The state allocates public funds to these companies to manage care for low-income, elderly, disabled Texans, and foster children.
One program, STAR Kids, provides Medicaid benefits to young people with disabilities. The state transitioned to this system in 2016. Since then, some families have reported changes in the availability and quality of care, according to Hannah Mehta, founder of advocacy group Protect Texas Fragile Kids.
“It’s a constant daily battle for families to try to maintain the care that their child needs,” she said.
A 2018 Dallas Morning News investigation profiled Mehta’s work, highlighting the profits made by some companies in the managed care system while denying or delaying essential medications and treatment to thousands of sick and disabled Texans. Numerous bills were introduced in the subsequent legislative session to address these issues.
Mehta stated in a previous interview with KXAN that she believes more oversight is necessary.
“I think that many policymakers would be extremely alarmed to see the extent of influence and the dirty tactics that go on behind the scenes — that families experience on a daily basis.”
Investigation into the Allegations
KXAN obtained a copy of a 2018 fraud, waste, and abuse report prepared for Superior HealthPlan, which detailed personal information of some healthcare workers and private citizens. This included social security numbers, personal histories, and even an aerial photo of a mother’s property. This mother was featured in the Dallas Morning News investigation after her foster child was denied care.
During the DOGE hearing, Rep. Capriglione accused Sanders and the company of targeting the journalists who worked on the Dallas Morning News series. Rep. Ellen Troxclair also accused the company of misusing taxpayer dollars while potentially failing to provide the best care for Texas children.
“Now we’re up here talking to a company who has received millions, billions of dollars in taxpayer funds through Medicaid contracts who have used that money to then hire private investigators to follow around patients and legislators that are asking questions about what the heck is going on,” Troxclair said.
Sanders reiterated that the discussed investigations occurred years ago. Troxclair then asked, “Why would we believe that?”
Attorney General Paxton, in his Thursday announcement, stated that the investigation would immediately begin to investigate “potentially unlawful actions.”
“I will get to the bottom of this, uncover any illegal activity, and hold bad actors responsible. Justice will be served,” the release stated.
KXAN’s John Thomas and Nabil Remadna contributed to this report.
