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

By: and - September 29, 2022 11:30 am

Centene Corp. headquarters in Clayton (photo from Google Maps).

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

St. Louis-based 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 a significant result in our work to protect taxpayer dollars and the integrity of our MassHealth program,” Healey said in a statement. “We are pleased to secure these funds to help control Medicaid costs and ensure that state resources are directed to the best possible uses in our health care system.”

Centene on Wednesday denied wrongdoing in Massachusetts, as it has 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 significance we place on addressing their concerns and our ongoing commitment to making the delivery of healthcare local, simple and transparent,” Centene said in a statement emailed to KHN. “Importantly, this allows us to continue our relentless focus on delivering high-quality outcomes to our members.”

Centene provides health insurance to 15.4 million Medicaid enrollees across the country by contracting with states to cover people who have disabilities or are in low-income families. The St. Louis-based insurer earns 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 Medicaid enrollees’ prescription medications through what is called a pharmacy benefit manager. These benefit managers act as middlemen between drugmakers and health insurers and as intermediaries between health plans and pharmacies.

Centene’s CeltiCare subsidiary offered insurance to Massachusetts Medicaid enrollees until the state began to overhaul its program. Centene also administered pharmacy benefits for the state 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, its statement said.

Multiple states have settled with Centene’s pharmacy manager business over allegations that it overbilled their Medicaid programs for prescription drugs and pharmacy services. But the total number of states is not publicly known because many of the settlement negotiations are conducted behind closed doors. Some states, such as California, have been investigating the company, KHN first reported in April.

Before the Massachusetts agreement, Centene had settled with Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Ohio, Texas, and Washington for a total of $475 million, according to news releases and settlement documents from attorneys general in those states. The Massachusetts settlement, which was signed Sept. 23, brings Centene’s pharmacy 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 publicly disclosed.

Centene set aside $1.25 billion in 2021 to resolve the pharmacy benefit manager settlements in “affected states,” according to a July filing with the U.S. Securities and Exchange Commission that did not specify how many states.

Florida and South Carolina have signed legal agreements with a Mississippi-based firm, Liston & Deas, that has represented other states in their pharmacy benefit inquiries into Centene.

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

This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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Andy Miller
Andy Miller

Andy Miller, interim Southern Bureau Editor of Kaiser Health News, has been a health care journalist for 29 years. Miller graduated from Duke in 1973 and received a master’s in education from Duke in 1979. He was a social studies teacher and basketball coach before switching careers to journalism. He entered the master’s in journalism program at University of North Carolina in 1984. He was hired by the Atlanta Journal-Constitution, where he had editing and reporting positions before switching to health care in 1992. He covered that beat until 2009, when he retired. He launched Georgia Health News in 2010, where he continued as editor and CEO until Georgia Health News joined KHN.

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Samantha Young
Samantha Young

Samantha Young is a senior correspondent with Kaiser Health News and an award-winning journalist with 25 years of experience who covers health care politics and policy in California, focusing on government accountability and industry influence. As a former reporter for The Associated Press, Samantha covered the California legislature and the Schwarzenegger administration, statewide political campaigns and the state’s groundbreaking climate change law. She spent seven years in Washington, D.C., where she covered Congress and the federal government for newspapers in the Stephens Media Group. She is graduate of the University of Missouri-Columbia journalism school.

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