A federal judge in Charlottesville has ruled that two former and current Sentara executives must provide additional information in an ongoing investigation into how the company set health insurance rates for 2018 and 2019.

The March 8 order by U.S. District Judge Elizabeth Dillon requires Michael Dudley, the former CEO of Sentara’s subsidiary Optima Health Plan, to provide up to two hours of additional testimony. Optima Chief Actuary James Juillerat must provide up to four hours of additional testimony. Judge Dillon also denied Sentara’s motion to fully seal documents, ruling instead that some documents should be partially redacted to protect sensitive information.

According to the opinion accompanying the order, the government has been investigating Sentara under the False Claims Act since 2021. The rates set by Optima for 2018 were the highest in the country, and the investigation is focused on whether whether “Optima, Sentara, or others defrauded regulators to obtain approval for premium rates that Optima, Sentara, or others knew to be excessive and unjustified in violation of the ACA, among other laws.”

Optima’s rates for families under the ACA topped $3,000 per month, and the company reaped $640 million in premiums including $540 million in subsidiary payments from the government in 2018, according to a previous court filing. 

In a December hearing, the government argued that in April 2022, Sentara had represented that all documents responsive to the inquiry had been produced but that subsequent oral testimony of custodians including Dudley and Juillerat relied on documents that had not been provided by Sentara. Sentara then produced between 2,100 and 2,800 new documents following a re-review of its records. The government claimed the new records contain “important details requiring further investigation,” including additional sworn testimony from Dudley and Juillerat.

The judge’s order notes Sentara’s claim that “the failure to produce all of the documents was inadvertent in this complex matter and that it has cooperated and produced many documents” and says “the court has no reason to doubt these representations.”

In an emailed statement  to Charlottesville Right Now, Sentara spokesperson Michael Kafka says the company has cooperated with the investigation by providing more than 27,000 documents and approximately 70 hours of interviews from seven former and current employees to date.

“This recent ruling on procedural matters will help clarify the process moving forward. As it has for nearly three years, Sentara will continue to operate in good faith and looks forward to a resolution of this matter,” the statement reads.

The statement also defends Sentara’s health insurance rate-setting as a response to health insurance policy destabilization in 2017 that put more than 350,000 Virginians at risk for not having access to health insurance on the exchanges.

“Sentara had a choice: follow the same path as some of the biggest insurers and exit, or work with state and federal officials to ensure residents of Charlottesville and other regions still had access to an ACA-eligible plan,” it reads. “At the urging of state and federal officials, Sentara formulated rates in just 26 days that normally take six months or more to develop. These rates were verified by a leading independent actuarial firm and approved twice by Virginia regulators.

Sentara stood with Virginians then and remains steadfast now in our commitment to providing comprehensive, high-quality care for Virginia communities.”