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Centene agrees to pay Iowa $44 million to settle Medicaid fraud claims

By: - December 21, 2022 12:25 pm

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

Missouri-based Centene Corp. has agreed to pay Iowa $44.4 million to settle claims that it defrauded the state’s Medicaid system.

That makes it the latest state to settle claims that were originally raised in Ohio in 2021.

Centene, the nation’s largest Medicaid managed-care company, agreed to pay the money over claims that its subsidiary, Iowa Total Care, overbilled taxpayers for prescription drugs in transactions handled by a Centene-owned drug middleman, Envolve.

Medicaid managed-care companies such as Iowa Total Care contract with state Medicaid agencies to sign up patients and create networks of providers such as doctors and dentists to care for them. Pharmacy benefit managers such as Envolve contract with such managed-care organizations to create lists of covered drugs, contract with pharmacies and reimburse them for the drugs they dispense.

In March 2021, Ohio Attorney General Dave Yost sued his state’s Medicaid managed-care provider, Buckeye Health Plan. That suit accused the company of working through Envolve and another Centene-owned pharmacy middlemen to overcharge taxpayers by millions of dollars for prescription drugs.

The investigation followed reporting in 2018 by The Columbus Dispatch showing that a year earlier, Buckeye charged the state $20 million for services provided by its drug middleman. But those same services appeared to have been rendered by a separate company — CVS — that was also paid, the story said. Both Centene and CVS denied that they were double-dipping.

In June 2021, just three months after the suit was filed, Yost and Centene announced a settlement agreement that would pay Ohio $88.3 million. Centene also announced that it was setting aside more than $1 billion to settle similar claims with as many as 20 more states.

In August 2021 — just six months after the Ohio attorney general accused Centene of massive fraud against Ohio taxpayers — the Ohio Department of Medicaid signed a new contract worth billions with the company. The department justified the move by saying that it would no longer use the company for pharmacy benefit management services.

Other states settling similar claims with Centene include Arkansas, Illinois, Kansas, Mississippi, New Hampshire, New Mexico, Texas, Oregon, Massachusetts and Washington. It’s unclear whether any of those states cut ties with the company over allegations of fraud.

For its part, Centene has emphasized that in entering into the settlements, it wasn’t admitting wrongdoing.

“We respect the deep and critically important relationships we have with our state partners,” Iowa Public Radio quoted a Centene statement as saying. “This no-fault agreement reflects the significance we place on addressing their concerns and our ongoing commitment to making the delivery of health care local, simple and transparent. Importantly, this allows us to continue our relentless focus on delivering high-quality outcomes to our members.

This story was originally published by the Ohio Capital Journal, a States Newsroom affiliate. 

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Marty Schladen
Marty Schladen

Marty Schladen has been a reporter for decades, working in Indiana, Texas and other places before returning to his native Ohio to work at The Columbus Dispatch in 2017. He's won state and national journalism awards for investigations into utility regulation, public corruption, the environment, prescription drug spending and other matters.