Centene agrees to pay Massachusetts $14 million for Medicaid prescription claims

Massachusetts has become the latest state to settle with health insurance giant Centene Corp. over allegations that he overcharged the state Medicaid program for pharmacy services, KHN has learned.

Centene, the nation’s largest Medicaid managed care insurer, will pay $14.2 million, according to Massachusetts Attorney General Maura Healey. An official announcement is expected later Thursday.

“This settlement is an important outcome in our work to protect taxpayer dollars and the integrity of our MassHealth program,” Healey said in a statement. “We are pleased to obtain these funds to help control Medicaid costs and ensure state resources are directed to the best possible uses in our health care system.”

Centene on Wednesday denied wrongdoing in Massachusetts, as he did in previously announced settlements. KHN reported earlier this month that Centene agreed in July to pay Texas nearly $166 million.

“This no-fault agreement reflects the importance we place on addressing their concerns and our continued commitment to making local healthcare delivery simple and transparent,” Centene said in a statement emailed to KHN. “Most importantly, it allows us to continue our relentless focus on delivering high quality results to our members.

Centene provides health insurance to 15.4 million Medicaid enrollees across the country by contracting with states to cover people with disabilities or from low-income families. The St. Louis-based insurer gets about two-thirds of its revenue from Medicaid, which is jointly funded by state and federal taxpayers.

In many states, insurance companies such as Centene also administer prescription drugs for Medicaid enrollees through what is called a Pharmacy Benefit Manager. These profit managers act as intermediaries between drug manufacturers and health insurers and as intermediaries between mutuals and pharmacies.

Centene’s CeltiCare subsidiary offered insurance to Massachusetts Medicaid enrollees until the state began revamping its program. Centene also administered drug benefits for the state’s Medicaid program, MassHealth, according to the attorney general’s office.

A review by Healey’s office found “irregularities in the pricing and reporting of pharmacy benefits and services” by Centene’s pharmacy benefits manager, Envolve Pharmacy Solutions, according to its statement.

Several states have settled with Centene’s pharmacy manager business over allegations that he overcharged their Medicaid programs for prescription drugs and pharmacy services. But the total number of states is not known to the public because many settlement negotiations are taking place behind closed doors. Some states, like California, have investigated the company, KHN first reported in April.

Prior to the Massachusetts deal, Centene had settled with Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Ohio, Texas and Washington for a total of $475 million. , according to press releases and settlement documents from those states’ attorneys general. The Massachusetts settlement, which was signed Sept. 23, brings Centene’s pharmaceutical services settlement total to at least $489 million. Other states have also settled with Centene, but the settlement amounts — and the states themselves — have not been made public.

Centene has set aside $1.25 billion in 2021 to resolve drug benefit manager settlements in “affected states,” according to a July filing with the U.S. Securities and Exchange Commission that does not specify the number of states.

Florida and South Carolina have signed legal agreements with a Mississippi-based company, Liston & Deas, which has represented other states in their investigations into the pharmaceutical benefits of Centene.

Pharmacy benefit managers in general have come under increasing scrutiny and criticism. The Federal Trade Commission announced in June that it was launching an investigation into the drug benefit management industry and its impact on consumer access to prescription drugs and drug costs.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues. Along with policy analysis and polls, KHN is one of the three main operating programs of the KFF (Kaiser Family Foundation). KFF is an endowed non-profit organization providing information on health issues to the nation.

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