Ohio suit against health care giant is sealed. Here’s why

By: - March 16, 2021 12:50 am

Ohio Attorney General Dave Yost. (Photo by Justin Merriman/Getty Images)

Ohio Attorney General Dave Yost last week filed suit against the largest Medicaid managed-care provider in the United States. 

The suit appears to accuse St. Louis-based Centene of improper billing, misrepresentation of its costs and other offenses. But it’s impossible to know for sure because the case was filed under seal.

For the most part, court proceedings in the United States are public for an important reason: Transparency increases public confidence in the justice of the system. 

There are, of course, exceptions. For example, many proceedings involving juveniles are closed to protect their identity.

But the Centene suit deals with the expenditure of public dollars on behalf of a state agency — issues that are about as public as you can get in terms of open-records laws. What appears to be at issue instead is that Centene is insisting that some of the information Yost used to bring the case are business secrets.

“AG Yost has said he wants the lawsuit unsealed,” spokesman Lucas Sullivan said in an email Monday. “But rather than spending the time on litigating that he chose instead to get the ball rolling on addressing the real issues.

“AG Yost wants to stop Centene’s deceptive practices as soon as possible.”

Centene couldn’t immediately be reached for comment.

In announcing the suit, Yost didn’t say how much money he was seeking, but it could be in the tens of millions of dollars.

Centene, which serves as managed-care provider to 13% of all U.S. Medicaid recipients, owns one of Ohio’s five providers, Buckeye Health Plan. Buckeye in 2017 employed CVS Caremark to serve as its pharmacy benefit manager to provide such services as creating a pharmacy network, negotiating rebates, creating preferred drug lists and reconciling claims.

An analysis commissioned by the state in 2018 found that in 2017, CVS Caremark and another pharmacy benefit manager, OptumRx, billed taxpayers $224 million more for generic drugs than it reimbursed the pharmacists that dispensed them.

That was on behalf of all five of the state’s managed care plans. The same report found that the Centene-owned plan, Buckeye, also hired another Centene-owned company, Envolve.

The same analysis that found a huge gap between what the pharmacy benefit managers were getting for drugs and what they were passing along also found that Buckeye paid Centene $20 million for… something. Medicaid’s description of the services the company provided was identical to that of services CVS said it was providing, although CVS and Centene later said their services were distinct.

In any case, the analysis found that Buckeye was charging Ohioans more than twice as much to fill each prescription than the average of the other four managed care providers.

Centene said the suit filed last week was without merit and that it would fight it vigorously. 

But it could be awhile before we know exactly what’s being contested.

“It was necessary to agree to (a non-disclosure agreement) with Centene in order to get the information needed for litigation,” Sullivan said.

While it’s unclear exactly what information can’t be disclosed publicly, it seems likely that it has to do with drug-pricing data PBMs use to determine pharmacy reimbursements. The companies say they use it to save taxpayers money, but many community pharmacies in Ohio say PBMs use the secrecy to pad their pockets.

The huge corporations have already shown that they’re willing to go to great lengths to protect the secrecy of their pricing data.

In July 2018, when the Medicaid department wanted to release an unredacted version of its report showing that the PBMs billed the state far more for drugs than they paid pharmacists, CVS Caremark and OptumRx filed suit in Franklin County Common Pleas Court.

The companies have fought fiercely to keep the information sealed even after some of it was published by the Columbus Dispatch in January 2019. The case continues to languish, with a status conference scheduled in two weeks — more than two-and-a-half years after it was filed.

So it could be awhile before we know exactly what Ohio is accusing Centene of.



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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.